Private equity firms are looking for talented bankers and generally focus on a few key things: your poise and how you present yourself; your basic skills in the industry; how well you’ll “fit” with their firm, and your deal experience. Don’t focus on pay at this point.
The way you introduce yourself is often overlooked but it creates a strong first impression. Be ready to describe yourself confidently, in a few sentences (think “elevator pitch”) and make sure you mention what you are doing now, any key skills you possess, and the quality of the training you have. Private equity interviews are a bit less formal than investment banking interviews, more of a conservation. So establishing personal rapport is important.
You may have to answer the obvious questions of why private equity? Why our firm? Your answers will reveal how much research you’ve done about their organization. Being able to link your reasons with their company strengths is obviously a plus.
Some firms will throw you a bunch of technical questions, to test your basic level of skill and understanding of the industry. These could cover valuation methods, industry terminology, or where you think the opportunities are for the industry in the next three years.
Then there are the “fit” questions about why you want to be in private equity. Here you need to focus on reasons such as acquiring more in-depth knowledge, more responsibility, and adding more value to transactions and client businesses.
Private equity firms want analysts and associates with solid M&A and LBO deal experience. So it’s critical that you decide in advance which deals you are going to focus on. Chances are they are the ones you chose to highlight on your resume. It’s better to pick transactions that are either unusual or where you made a significant contribution, so that you can discuss your contribution or what you learned. When discussing deals, give a quick overview of the company, industry and highlight the major points before zeroing in on the conclusion you want to leave with the interviewer.
If you don’t have any M&A or LBO deal experience, you need to find types of projects that demonstrate similar skills, such as work that improves the operations of a company, due diligence or in-depth equity research.
A private equity interviewer may also give you a case study to evaluate, with background documents such as an offering memorandum, filings and other company documents. They’ll want you to examine the materials and present your investment recommendations either in person or in document form, with Excel spreadsheets. Some firms may have you do this on the spot; others may give you weeks to prepare it. The important thing is to focus on the key points regarding the industry, company, management team, financials, and risk factors and how you would structure the investment.
Finally, some firms will toss a few behavioral questions your way, as a means of revealing your character and performance in difficult situations. For example, they may ask:
-Tell us about a time you failed on a project and how you reacted
-How have you dealt with conflict with a co-worker?
-Do you prefer to work in teams or alone?
-What did you do when a co-worker or client was upset at you?
-How would you handle a situation where you were blamed for something that was not your fault?
– What are you most proud of in your career to date?
-Where do you want to be in five years?
You will begin to assemble a binder or Word file of your answers to these different types of private equity interview questions. You’ll practice your answers so they sound natural, specific and convincing. And you’ll be constantly updating and modifying this interview book until you land that elusive private equity job.
References:
www.mergersandinquisitions.com
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