Private equity (PE) is one of the most coveted corners of finance. Hence, entering the industry is very challenging. Whether you’re a student trying to jump start your career or a recent graduate seeking to transition in this exciting field, here are a few tips.
The most common path to enter the buyout industry has traditionally been after working a few years in investment banking or consulting. Most of the hiring occurs at the junior levels because organizations want to groom young professionals and mold them to the investment philosophy of their organization. It remains the case although there are opportunities at a later stage for successful entrepreneurs and seasoned executives. Moreover, organizations really seek to limit turnover among senior investment staff (a red flag for LPs). If you have a more entrepreneurial bent, VC may be a better fit. The path to VC and the team profiles are different, but the mindset and tips below generally remain applicable.
- Write a Cover Letter: Take the opportunity to express your personality and explain your motivations (academic, professional). Don’t copy-paste for each application. It will be obvious if you do. Show that you have done your homework and that you’re familiar with the company and the position you’re applying to. Goldman Sachs’ HR chief says this is the key to writing a winning cover letter and the PE Jobs Digest gives a few industry-specific tips. Be memorable according to the WSJ!
- Become an Apprentice: It is finally spring and for many students it is crunch time to find an internship. As Tim Ferriss recommends, value learning above everything else. Overall, the analyst or associate job will be stimulating, but forget the Gordon Gekko stereotypes. You won’t become the master of the world overnight, but you’ll definitively learn to master Excel and PowerPoint. Have an open mind. Jump on opportunities to work on new projects and expand your horizons.
- Demonstrate Curiosity: The most important trait according to the executive search firm Egon Zehnder. They found a link between high potentials and curious nonconformists. Be yourself, be honest, focus on your strengths, be curious, and consider how you can add value to your team. While PE tends to be a more conservative industry and this strategy may not work everywhere, I believe progressive companies open to “constructive nonconformity” can get more out of their workforce. Organizations that don’t let employees question the status quo will eventually face difficulties sooner or later.
- Prepare: The PE industry generates a lot of media attention and consequently a lot of interest. We had a few hundred applications for our last opening. The bar is high to say the least! Fortunately, there are more resources than ever for those curious about the profession. Wherever you come from, you’ll need a very developed business sense and excellent modeling skills.
- Marquee Group: the gold standard for financial modeling training in Canada. I’ve taken a course and I send all my analysts.
- Wall Street Prep: offers good tips to get into investment banking and PE. I haven’t taken their self-study courses, but it is worth a look.
- CFA: while not specific to PE, a very rigorous curriculum and a reputable designation in finance internationally.
- Case Studies: if you’re in school, participating to case competitions is perhaps the best training for the interview process.
- How to Negotiate Your Job Offer: You’ve received an offer; now what? If you’re applying to an entry-level position, don’t expect to have much room to negotiate your offer. Larger firms that hire regularly typically have corporate guidelines to follow. Deepak Malhotra of Harvard Business School offers fantastic advice. His negotiation advice is also applicable to negotiate promotions, transfers or pay raises.