The interview process for a private equity job resembles that for investment banking, in the sense that there is typically a “first round” of screening by phone or in person to determine whether you’re qualified for the job. Then there’s a much more in-depth “superday” of interviews where you’ll meet many different people in the firm, including Associates, Principals and Partners while they try to decide if you’re a good fit.
However, there are some nuances to the private equity interview process. You may have several interviews with the same person. You will typically have to do some sort of case study, either in advance or on the interview day, which you present to members of the firm. And you may be tested on your leveraged buyout knowledge and financial modeling skills.
Private equity firms are generally smaller than investment banks. Since they do not hire as many people, they can take more time and be more selective.
When interviewing, private equity firms will look for analysts with good M&A and LBO deal experience. They’re in the business of buying companies. So your capital markets or IPO experience doesn’t interest them. You’ll need to make a list of all the deals you’ve worked on and carefully decide which ones to feature, and why they mattered. Go back and review the details of these deals so they’re fresh in your mind. Chances are, they’re the same deals featured prominently in your resume. In this respect, it’s better to pick unusual deals or ones in which you contributed something significant, or learned something significant.
LBO deals are a good choice because you can describe why the deal worked and demonstrate your knowledge of the process. When talking about a deal, give a brief overview of the company, industry and major deal points, and then describe what was significant about that deal.
By all means do your homework and be prepared to discuss the PE firm’s portfolio and spend time researching the firm’s major competitors as well. By asking a few pointed questions, you can get the interviewer to “sell” the firm to you during your meeting. Some experts suggest that asking about things such as the business model, revenue model or other strategic questions about a portfolio company is a good way to showing you understand their business.
Private equity firms usually focus on well-established and already profitable companies. If your interest leans more toward technology or start-up firms, then you may want to tweak your resume and interviewing focus toward venture capital instead, which we’ll discuss in our next post.
References:
www.mergersandinquisitions.com
Tuck School of Business, Dartmouth College http://www.tuck.dartmouth.edu/
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