Private equity on-cycle recruiting has been dubbed the ‘Hunger Games’, and it’s easy to see why.
It’s a brutally competitive process. One recruitment firm found that breaking into PE is statistically more difficult than being drafted by the NBA. It’s also intentionally unpredictable, with candidates kept in the dark about interview schedules until the last moment. And for those who succeed, the reward is substantial. Recent reports show that an associate position at a top firm can pay as much as $400K.
The final trial in PE on-cycle recruiting is the superday. An intense series of back-to-back interviews and technical tests that assess your financial acumen, problem-solving, and poise under pressure.
This article shares candidate insights to help you prepare for the challenge and stack the odds (ever) in your favor.
1. Getting past the gatekeepers
Private equity headhunters are the gatekeepers of roles in the industry, and you need to impress them to secure your superday spot. Each year, they interview a pool of highly qualified and technically skilled candidates, which means you need more than a polished elevator pitch to stand out.
One successful on-cycle candidate emphasized the value of sharing their interest in specific verticals, geographies, and fund sizes, and then aligning these to firms. This allowed them to present a targeted shortlist of firms to the headhunter, each supported by a strong rationale.
If you have a solid background in technology and an interest in tech investments, KKR could be a great fit. Alternatively, if you have experience with real estate organizations, Blackstone might be a smart match as it dominates this sector. You’ll want to provide additional reasoning, but this is how you begin to build a compelling case for your target firms.
Headhunters may not quiz you on the nitty-gritty of a firm’s investment strategy, but they expect you to grasp its overall approach. Demonstrating this knowledge reinforces your commitment and positions you as a candidate who can add value to the organization.
2. Fitting in with the firm
When you interview with the firm itself, you should be prepared to go deeper. Each has its own investment philosophy and strategies, and demonstrating a thorough understanding of these can set you apart from other candidates.
A candidate who interviewed at Apollo noted that the firm prioritizes free cash flow (FCF) over EBITDA, distinguishing it from other PE funds. In the technical exercises, this should guide your calculations. Instead of analyzing how a company can increase profitability through higher margins (typically measured by EBITDA), you can assess how much cash remains after capital expenditures to pay down debt or distribute to equity holders.
Each private equity firm requires a tailored approach. By executing it effectively, you can demonstrate your understanding of their core values and communicate in a way that resonates with them. In your interview preparation, take the time to review the firm’s philosophy and investment strategy. You can also explore industry forums like Wall Street Oasis for first-hand candidate insights on what to focus on during your interview.
3. Mastering LBO modeling
Building LBO (leveraged buyout) models should be considered table stakes if you’re looking to break into private equity. PE professionals regularly use these calculations to assess the attractiveness of potential investments, determine optimal capital structures, and project financial returns.
As Sahil Chodhari, VP at H.I.G. Capital, emphasized in our recent article, “practice is key” because “that’s going to be your job”. Even if you consider yourself experienced in financial modeling, it’s important to recognize that the superday test will be a whole new challenge. It’s designed to assess how accurately you can build a model from scratch under tight time constraints, typically lasting between one and three hours.
The test’s complexity can increase with additional elements such as multiple debt tranches, changing interest rates, and sensitivity analysis. Interviewers may also throw curveballs during the exercise, such as suddenly asking you to adjust the debt structure based on a change in the company’s projected revenue or a shift in market conditions.
If you’re confident in your core LBO knowledge, your preparation should focus on working under time pressure and revising calculations as new information emerges. Sharpening these skills will serve you well during your superday.
4. Going beyond the brief
In a Wall Street Oasis interview, a successful on-cycle candidate spoke about the value of going above and beyond in the case study exercise.
The firm had provided details of an investment opportunity the day before the superday. Candidates were asked to analyze the opportunity and assess its viability, in preparation for a discussion with the interviewers.
To guide the conversation, the candidate created a few slides to highlight their key findings. This wasn’t a requirement, and none of the other candidates took this approach. However, the extra effort helped them to stand out, and they were one of only two candidates (out of ten) to receive an offer.
While this is a specific example, the candidate believes there’s an important takeaway. In private equity, you’ll be assessed on your ability to add value. Whether it’s proposing new capital structures or leveraging the firm’s existing portfolio to create opportunities, going above and beyond is key.
Before walking into the interview, think about how you can demonstrate your proactive mindset and willingness to exceed expectations.
From candidate to champion
Surviving the Hunger Games requires preparation, strategy, and adaptability — skills that are also crucial for private equity superdays. These interviews test not only your technical expertise, but also your ability to think on your feet and manage unexpected challenges.
For an edge in your preparation, follow M&A Community on LinkedIn. You’ll gain access to salary benchmarks, interview strategies, and career insights from experienced PE professionals.
