On-cycle recruitment in private equity is sometimes compared to a hiring gold rush. Some private equity firms launch their associate recruiting processes with very little notice, so candidates need to make sure they’re as prepared as possible for whenever the call might come.
Why do private equity firms recruit like this? Simply because they can. They know what they want and they’re not going to waste much time getting it. Candidates are highly motivated with half of those working in banking looking for a role in private equity, and the money on offer – over $300,000 in some cases – is certainly a sweetener.
It doesn’t always work out. According to Business Insider, 2022’s early on-cycle kick-off attracted too many unprepared candidates. There was a second recruitment round in early 2023, but many candidates would still be less than a year into their careers at that point. 2024’s on-cycle process is the earliest yet, with a number of firms kicking off before analysts started training.
I recently spoke to Matthew Moore and Lane Merlo, both Managing Directors at recruitment firm SearchOne Advisors, to get their advice on how to be successful in on-cycle recruitment. These are some of their top tips for candidates looking for a first role in private equity.
1. Polish your resume, but don’t go over-the-top
Recruiters and their clients often see your resume before they ever hear you speak. While it may be tempting to add something creative or unusual to stand out, Moore says this is not the place to do so.
“Don’t stray from the norm by adding a photo of yourself or non-traditional formatting. Keep it simple so people know where to find the information they’re looking for,” he says. “But I do like it when candidates show their personality a bit with a few lines at the bottom. It gives us something to talk about in interviews.”
Moore also warns against omitting your college GPA. “If I don’t see a GPA on a resume, I assume it’s very bad, but sometimes it’s not that bad and becomes a talking point when it really doesn’t need to be a talking point,” he explains.
When it comes to your career experience, Moore warns against trying to impress potential employers by including high-value deals where you only had a minor role. “We’re more interested in what you did on the deal as opposed to the name of the company. If you didn’t play a big part on a deal, don’t put it on as you won’t be able to speak to it.”
Finally, make sure not to include any sensitive non-public information. “You wouldn’t want to get in hot water with your current employer or end up disclosing something to an investment firm that you shouldn’t,” says Moore.
2. Be proactive and polite
The typical process in on-cycle recruitment is for recruiters to reach out to potential candidates. But there’s nothing stopping you reaching out to them, too.
According to Merlo, this doesn’t just mean sending an initial email, but also making sure that you’re performing some basic ‘contact hygiene’.
“Make sure we’ve got the right contact information for you. Especially if you have a really common name, make sure we have the right work email address if that’s what you choose to use,” she explains. “Also let us know what firms you’re interested in so we can update you when that company is recruiting.”
And it doesn’t hurt to stay in touch – just don’t let that become pestering. “You don’t need to send a recruiter an updated resume every couple of days. Once we have all your information, we’ll keep you in the loop,” says Merlo.
If you do secure an interview, remember to send a thank you note. It’s not just polite, it can be a deal breaker: “We’ve had candidates do well in an interview and not send a thank you note – they don’t move on to the next round as a result,” Moore reveals.
3. Presentation is everything
The rise in remote working has upended social norms around how to present ourselves at work. People are used to showing their home while on video calls, which has led to a more casual approach when choosing what to wear.
But while it can feel odd wearing a suit to join a Zoom call, it’s important to present yourself in a professional manner.
“You need to dress appropriately,” explains Moore. “And if you have to be in your bedroom, make sure that your bed is made behind you. There are simple things that sometimes people don’t think about.”
This extends to your electronic impression. Moore notes that if you’re still using your college email address, you may lose access at some point after graduating. “You want to be aware of the optics of your email as well. ‘John.Smith@gmail.com’ is better than ‘surferdude13@aol.com’,” he says.
4. Model candidate
A significant part of the interview process for many firms is a modeling exam. Given the short notice period for on-cycle recruitment, you need to be constantly prepared to sit the test.
“You wouldn’t believe the pass rates these days. They are lower than in the past,” says Merlo. “Those who are passing have practiced, so practice, practice, practice.”
And don’t expect to have access to add-ins you may be used to, e.g. Macabacus, because they probably won’t be available on the day of the exam.
5. Do your homework
Preparation isn’t limited to showing what you can do. Knowing who you want to work for and why is just as important. You need to research the company interviewing you. Be prepared to speak to the firm’s investment strategy, the areas they specialize in, and have good questions for them.
“Make sure to come prepared,” says Merlo. “Make sure you have a good answer as to why you want to work, not only in private equity, but at that particular firm. Not knowing anything about the firm interviewing you is disrespectful and an easy reason to cut you from the process.”
And don’t panic if you miss the bus
While the timing and pace of on-cycle recruiting grabs lots of headlines, it’s important to know there are other avenues to ending up in private equity.
Some large and even smaller firms are recruiting associates up to two years in advance; however, many firms, especially middle market, growth, venture, and hedge funds are hiring six to twelve months in advance. This includes some larger firms as well who prefer to interview candidates with a year of work experience.
“We’re filling lots of roles ‘just in time’, and some analysts are going through the on-cycle process as second years,” says Moore. “There are a lot of options from a timing perspective.”
