A career in private equity is highly desirable for many graduates who have dipped a toe in banking. In fact, dipping a toe is all they’ll get to do. The on-cycle hiring process for private equity typically begins a scant six months or so after candidates have left college.
Despite many having completed the requisite internships and summer placements, applicants often fear their resumes are too thin to make an impression, or that they lack the deals experience that PE funds might be looking for.
As with all things, it pays to be prepared. I recently discussed the on-cycle recruitment process with Sahil Chodhari, VP at H.I.G. Capital and Neal Monga, Principal at NMS Capital. They shared their top five tips for securing one of the most sought-after positions in finance.
1. Follow what’s worked before
There’s a reason private equity firms have largely followed the same recruiting process over the last decade. They understand what works well and don’t feel a need to recreate the wheel. The same applies to resumes.
“When we were analysts, we’d reach out to those who left for private equity and ask for example resumes and advice on the recruiting process,” says Monga. “It’s good to see a variety of resumes and to understand how recent private equity recruits positioned themselves while working at the same bank.”
Monga reveals that sample resumes can also be found online which can help applicants understand how best to structure the document and, crucially, what to focus on. “When we’re looking at resumes, it’s important to highlight the deals you spent the most time working on and very simply state the business model and transaction size. This is how interviewers decide which deal to focus on.”
Chodhari agrees that experience is the main talking point and education can often take a back seat. “For associate roles, I would keep your experience at the top. You should be speaking mostly to your banking years now.”
Monga also recommends having peers proofread your resume to weed out any errors or grammar issues.
2. Quality of deals, not quantity
In on-cycle recruitment, candidates are understandably worried that their relative lack of deals experience will be a hindrance for getting their first PE role.
“In banking, you might only have the opportunity to execute on equity follow-ons and IPOs. You can’t really control for that,” admits Monga. “If you are fortunate enough to work on a buy-side or sell-side transaction, you really don’t need to know more than two deals in detail. However, whether the transaction is an equity offering or a sell-side transaction, it’s important to illustrate that you understand the companies and their industries inside and out.”
“Don’t feel stressed,” Chodhari advises. Recruiters know you can’t have closed many deals by this point, he reveals. That said, it doesn’t hurt to talk to your company and ask to work on some sell-side, M&A transactions.
Similarly, Monga advises speaking to the wider deal team about what happened at the start or middle of the deal, “the parts you missed before you joined as an analyst.”
“You might also want to tailor your resume depending on the type of firm you’re looking at. For a larger size firm, it’s good to show them larger size deals – if you’ve got that experience,” Chodhari adds.
3. A little personality goes a long way
While your resume should be short and sweet, that doesn’t mean you should erase your personality altogether. Recruiters want to have something to interest them and talk about when they’re speaking to multiple applicants in a day.
“If you have a hobby, show some personality,” says Chodhari. “A lot of the time it does come down to culture and fit when people’s experience is very similar.”
4. Research and preparation
There are two key points to prepare for – the interview and the modelling test. Before candidates begin to think about how they present themselves, they need to think about how they fit into the firm they’ve approached. That includes understanding the firm’s investment principles and deal activity.
“Look at the firm’s website and review their recent deals. You want to build the story of why you’re interested in that firm specifically,” advises Monga. The intense nature of the recruitment process and volume of interviews requires practice and preparation.
“It’s helpful to work with other analysts and complete mock interviews where you practice telling your ‘story’, walking through your deals, and responding to others,” he says.
“A helpful little trick, at the end of each interview, ask the interviewer why they joined the firm. By the end of the third or fourth interview, you’ll have a long list of reasons on why other people joined that specific firm. If any of these reasons also resonate with you, then you can incorporate them into your interviews as you move forward in the process.”
When it comes to the modelling tests, practice is key. There are certain common aspects, such as an LBO (leveraged buyout) model, that Chodhari says are “table stakes.”
“You can tell who’s polished and who’s trying to wing it,” he explains. “Nine times out of 10 the polished person will get further.”
5. Practice makes perfect
Securing an interview is really when the rubber hits the road. Despite the tight timelines, Chodhari says that not preparing is “100% not the way to go.”
As with the resumes, it doesn’t hurt to be a little formulaic. “Make sure you have your story down pat. Why did you choose your college, your major, your employer? Why do you want to do private equity? Be crisp and articulate, but not robotic.”
According to Monga, it’s also important to outline your deals and practice walking through them from an investor perspective. “Be able to comfortably walk the interviewer through the industry trends, investment highlights, key risks and diligence areas, and your viewpoint on whether this will be a good investment for the ultimate buyer,” he says.
“Being able to show you can think critically is the most important part of the associate job.”
The final word
Both Monga and Chodhari emphasize the need to say “Thank you” – both in person and in a follow-up email.
“Make sure to send your email within 24 hours. You don’t need to overcomplicate it, just one or two lines,” Monga says.
“But if you don’t do it, and others do, you’ll be at a disadvantage”.
