Getting a Job in Private Equity: Behind the Scenes Insight into How Private Equity Funds Hire

242 Pages·2008·3.01 MB·English

by  Brian Korb

GETTING A JOB IN
PRIVATE
EQU ITY
BEHIND-THE-SCENES INSIGHT INTO
HOW PRIVATE EQUITY FIRMS HIRE
BRIAN KORB AARON FINKEL
AND
John Wiley & Sons, Inc.
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GETTING A JOB IN
PRIVATE
EQU ITY
BEHIND-THE-SCENES INSIGHT INTO
HOW PRIVATE EQUITY FIRMS HIRE
BRIAN KORB AARON FINKEL
AND
John Wiley & Sons, Inc.
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Copyright © 2009 by Glocap Search LLC. All rights reserved.
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Published simultaneously in Canada.
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ISBN-13 978-0-470-29262-4
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
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CONTENTS
Preface v
Acknowledgments viii
About the Authors ix
Chapter I Getting Started 1
Chapter II Out of Undergrad 19
Chapter III Pre-MBA 25
Chapter IV Out of Business School 59
Chapter V Post Graduate School: Experienced Deal/Advisory Professionals 89
Chapter VI Post Graduate School: Experienced Non-Deal/Advisory Professionals 97
Chapter VII Breaking into Venture Capital 103
Chapter VIII Working at Fund of Funds, Hybrid Funds & Secondary Funds 129
Chapter IX Finding the Right Fit 145
Chapter X The Resume 155
Chapter XI The Interview 161
Chapter XII Compensation 177
Chapter XIII Working with a Recruiter 181
Chapter XIV On the Job: What to Expect 185
Appendix A Resources 193
Appendix B Sample Resumes 199
iii
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PREFACE
W
hen we sat down to write this guide, our goal was to paint an accurate picture of
career prospects in the private equity industry. We wanted to excite candidates about
the industry and encourage them to pursue their dream job. At the same time, how-
ever, we didn’ t want to give anyone false hopes. For most, fi nding a position in private
equity will be diffi cult, as the number of candidates pursuing private equity opportuni-
ties has always far outpaced the number of available positions.
P erhaps never before has the private equity profession wielded such power or played
as important a role in the fi nancial markets as it does at present. The appeal of work-
ing in the industry is obvious: Private equity is about investing millions (sometimes
billions) of dollars into companies and helping determine their fate by exerting infl u-
ence on operations and strategy, and in today ’ s market that includes some of the most
prominent companies in the world. Private equity investors work with companies
from the initial investment to the time they are taken public or sold. They are pas-
sionate about investing and have the ability to create tremendous value.
I f you’ v e already looked into getting a position at a private equity fund, you may
have been warned that the challenge could be daunting and the competition fi erce.
This guide will give you a better understanding of the career path in private equity and
how the hiring process works. However, we do not profess to offer surefi re, can ’ t - miss
strategies for securing a position, because there simply aren’ t any! Remember, too, as
in other industries, there can be timing issues and natural business cycles that are out
of your control. Instead, our aim is to give you insight into the elements that are in
your control so you can put your best foot forward during your pursuit of a job. This
guide also does not take a textbook look at private equity, give a detailed history of the
industry, or explain how funds are raised and deals are done. You can get that informa-
tion from many other sources (some of which are listed in Appendix A).
W e segment candidates seeking positions in private equity by where they are in
their professional careers, and thus we have chapters on the most common entry
points: out of undergrad, pre - MBA (which, as you will see, often means being hired
out of an investment banking or consulting analyst program as these are typical i nitial
feeders into private equity jobs), from business school and postgraduate school. We
devote a separate chapter to venture capital (earlier - stage investing) because the skill
sets that venture funds look for, the timing of the opportunities to break in, and the
career track can all differ signifi cantly from later - stage private equity funds. There is
v
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vi Preface
also a chapter on private equity fund of funds, hybrid funds, and secondary funds, as
those run slightly different recruiting processes and hire different types of candidates.
This guide focuses primarily on junior and senior (non- partner) roles at mid- and
later -s tage private equity and leveraged buyout (LBO) funds. When we use the tra-
ditional term private equity (PE), we are referring to the entire spectrum of early - to
later - stage investing. When discussing a specifi c portion of the market, for example
venture capital or buyouts, we will note it by name.
Most candidates target a long - term career in private equity by following what we
call the traditional path, which starts early in their career. We also call this the 2 - 2 - 2
route because it usually involves spending two years in an analyst training program
(usually investment banking or consulting), followed by two years in a private equity
fi rm and then two years in business school before securing a career- t rack opportunity.
As you read this guide, you will learn that it is increasingly diffi cult to enter the proc-
ess later in your career to make up for missed experiences. If you didn’ t land in an
investment banking or consulting analyst program after graduating from college, it
will be more diffi cult to secure a pre - MBA position at a PE/LBO fund; and if you wake
up one day in business school (or several years later) and have an epiphany that PE
investing is your true calling but you lack prior PE experience, the battle is likely to
be even more challenging.
We will outline the traditional path and refer to it throughout this guide, but it is
not the only way to get into PE. There are those who break in via other ways, and we
make certain to give attention to them as well.
REAL - LIFE STORIES
A s recruiters who specialize in private equity, we are well- p ositioned to offer career
advice: We know what the hiring fi rms demand and we are intimately aware of the
experiences of candidates who have successfully found positions. Thus, in addition to
our own guidance, we believe a great way for you to r eally get a grasp of the private
equity search process is to read insight from those on both sides of the equation who
have experienced it fi rsthand. For the hiring fi rms, we include insight (Insider Tips)
throughout the book from PE professionals, some of whom are in positions where they
make hiring decisions.
On the candidate side, we have fi rsthand accounts (case studies) of 36 individuals
who went through the search process, and we have included resumes from 15 of them.
The experiences outlined in the case studies run the gamut from those who broke into
PE the more traditional way to those who lacked the usual requirements but were still
able to secure a position in a less traditional way. We have case studies from pre - MBAs,
current MBAs, and professionals up to several years out of graduate school. What the
authors of all the case studies have in common is that they were top performers and high
achievers both academically and professionally and had a burning desire to succeed.
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Preface vii
By reading the case studies you will quickly see that, in most instances, to secure
a position in private equity you must be willing to commit early, put in the work, get
the best education/training, and do whatever else it takes to excel— and that ’ s true
whether you eventually break in via the traditional or nontraditional path. Are we
saying that many of our readers will fi nd a position without the traditional back-
ground? No, but if you follow the advice of those who were the exceptions, and if
you, too, have a stellar reputation and are willing to work hard, you can improve your
chances of being an exception as well.
W e believe the competitiveness, intensity, pace, and even the potential for com-
pensation in the private equity industry parallels the sports world; therefore, at times
we use professional sports analogies to describe various aspects of the job market. In
fact, sports terms are commonly used by private equity professionals, so you may fi nd
being familiar with them a useful asset going forward. For example, funds hiring at the
more senior level may tell us they are looking for someone who can q uarterback a deal.
When targeting junior level staff, the same funds say they want people who can b lock
and tackle for their deal teams. Mid- m arket funds often want utility fi elders who can
take on many roles, given that they are smaller, less structured organizations.
We view the process of fi nding a position in private equity as similar to that of
reaching the pinnacle of professional sports; thus, as someone striving to make it, we
think you should tackle your search in a similar way as someone training to be a
pro athlete. Think of working in private equity as the major leagues. To succeed in
either athletics or private equity you need to have a high level of natural ability and
work overtime to make up for areas in which you are defi cient. In baseball, if a pitcher
can ’ t throw a 90 - mile - per - hour fastball he will have a tough time making it to the
majors. And even if he c an throw 90 mph, there is no guarantee he will make it. You
may have everything that it takes to eventually work in private equity, but for a vari-
ety of reasons could still fi nd yourself on the short end of the stick. We hope this guide
will also help you reduce the chances of that happening to you.
I f you want to be a big earner and a superstar in this industry, you are going to have
to do the work to get there — but you will have to do the right work. Anyone can
work hard. Getting ahead in PE is about working smarter and getting on track early.
We wish you luck!
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