A job in private equity is the ultimate goal for many investment bankers. It offers great financial rewards, intellectually stimulating work, and a better work-life balance.
But it’s no surprise that breaking into private equity is challenging. Impressive credentials alone won’t cut it in the on-cycle recruitment process. To succeed, you need to show that you can think like a private equity professional and prove that you’re the right fit for the firm. But how can you do this before even stepping in the door?
I spoke with Sahil Chodhari, VP at H.I.G. Capital, and Neal Monga, Principal at NMS Capital. They shared five insider strategies that can help candidates gain a competitive edge in the recruitment process.
1. Focus on deal depth
While private equity resumes follow a tried-and-true format, candidates often forget that depth trumps breadth. Chodhari points out that a common mistake applicants make is including a deal on their resume to beef up their experience, without having the knowledge to discuss it in detail.
“You shouldn’t include a deal that you don’t have deep knowledge of, otherwise you can be caught out,” he says. “That’s the biggest area we see associates stumble.” The focus should be on demonstrating a solid understanding of your contributions, rather than listing numerous deals you can’t confidently discuss.
You shouldn’t include a deal that you don’t have deep knowledge of, otherwise you can be caught out.
Sahil Chodhari, VP at H.I.G. Capital
“Having two deals covered in detail is perfect,” adds Monga. “Highlight these and mention two other deals with one sentence each. This will encourage the interviewer to call out the ones with the most information.”
By prioritizing quality over quantity, candidates can demonstrate a key skill valued by private equity firms — thorough and thoughtful analysis of data.
2. Think like an investor
Many candidates approach deal discussions in interviews as a formulaic regurgitation of data, walking through the business profile, investment highlights, risks, and diligence areas.
Chodhari notes the importance of being thorough, but urges candidates to flip the script. “You want to explain the background of a deal very quickly,” he says. “Then you should flip it.” That means exploring why you think this would be a good or bad investment for their PE firm.
You want to explain the background of a deal very quickly. Then you should flip it.
Sahil Chodhari, VP at H.I.G. Capital
“This is a way to clearly differentiate yourself from the competition,” Chodhari adds. It shows that you’re already thinking like an investor, which the interviewer will see as a strong indicator of your potential in private equity.
3. Justify your assumptions
Financial modeling tests are a fundamental part of the PE interview process. When it comes to them, “Practice is key,” according to Chodhari. He adds that you should be able to build LBO (leveraged buyout) models from scratch. “That’s going to be your job, so it’s a good barometer on whether the role is right for you.”
While candidates may expect to be tested in this way, Chodhari explains that they must also be ready to back up their assumptions. “You must have a reason for the growth rate you’ve projected or the 12x multiple for the company’s valuation.”
According to Neal, “Showing your reasoning is often more important than being right.” Interviewers want to see how you think through scenarios and respond under pressure, rather than having the perfect answer.
4. Build your story
Having a strong reason for wanting to join the firm is crucial, and Neal suggests a smart approach candidates can take to develop this. “A little trick at the end of each interview is to ask the interviewer why they joined the firm,” he says.
“If you’re doing a Superday, by the end of your third interview, you’ll have all the reasons why different people joined. Then you can use the ones that resonate with you most.” This offers a more compelling angle than pointing to the firm’s deals as your reason for applying.
A little trick at the end of each interview is to ask the interviewer why they joined the firm. Then you can use the ones that resonate with you most.
Neal Monga, Principal at NMS Capital
In addition, Neal recommends tailoring your questions to the interviewer. “You want to ask relevant questions to them based on their role,” he says. “You don’t want to ask an MD what building a LBO model is like. Instead, you can ask them about the process of sourcing new business.”
Doing this shows that you’ve done your homework. It’s also more likely to spark an interesting conversation, which will help you to stand out.
5. Act the part
When it comes to interviewing with senior partners, Chodhari explains it’s all about culture and fit. “They might not even want to dive into a deal,” he says. “So you need to be prepared to carry the conversation.”
Showing that you can do this will help demonstrate your fit for the boardroom. “Senior partners are looking for candidates who they would feel confident bringing to a client meeting,” adds Chodhari.
Senior partners are looking for candidates who they would feel confident bringing to a client meeting.
Sahil Chodhari, VP at H.I.G. Capital
The key to this type of conversation is being prepared to discuss not only deals, but also broader strategic topics. This could include the firm’s place within the market, future growth opportunities, and even how you’ll contribute to the company’s goals. This will show that you’re already thinking about the firm as a whole and you understand what it takes to add value, beyond just crunching numbers.
Ready to stand out?
Breaking into private equity is no easy task, but with the right strategy, you can significantly boost your chances of success. By following these tips, you’ll be better equipped to engage with your interviewers and demonstrate why you’re the right candidate for the role.
For more expert advice, read our article, How to get hired in PE on-cycle recruitment: Five top tips from recruiters and keep an eye out for future M&A Community events.
