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Private Equity-Getting Hired

Know the Field

Job Searching in This Industry

Many people working in private equity today joke that the job found them, not the other way around. The firms were small, nimble, and only needed a few key people to operate, as so many of their other functions were outsourced to consultants and specialty shops. “I was on the team at an investment bank that had represented a target company in an LBO,” says a deal-maker now working for one of the top-five private equity firms in the world. “I wasn’t even the lead guy, but I had come up with something that caused my client’s company to be valued substantially higher than anyone had thought. After the deal closes, my phone rings. It’s the head of the (private equity) firm, and he’s talking about salary and bonus money that I’d never thought I’d see in my career.”

Breaking into Wall Street

Despite astronomical growth throughout the finance sector in the past 20 years, the Wall Street deal-making community remains very much a tight-knit fraternity. (And fraternity is indeed the right word; women in private equity are rare. In 2017, only 17.9 percent of all private equity professionals worldwide were women, according to Preqin. However, the majority of firms have actively tried to recruit women.) Openings in private equity firms aren’t an everyday occurrence, except at the largest firms, which used the private equity boom of the 2000s to expand aggressively around the world. Indeed, for younger and more inexperienced candidates, the larger firms may provide the best opportunities to latch on at a private equity firm.

For years, private equity firms gave little thought to actually posting job openings, let alone recruiting talent right out of college, or even out of MBA programs. They had plenty of capital to use in hiring the absolute best and brightest on Wall Street. “There was a time, particularly in the mid-to-late 1980s, when private equity was the pinnacle of deal making on Wall Street— that whole Barbarians at the Gate, Masters of the Universe thing,” said one longtime managing director of a private equity firm.

Yet today the pool of available talent has been spread thin. Hedge funds, in particular, have attracted more and more of the experienced professionals that private equity firms crave with the lure of becoming a billionaire in a short time, and even the traditional Wall Street firms and other corporations are willing to lavish millions on their best people to get them to stay put.

Despite this, many private equity firms still keep to old hiring practices—only a small number have a “careers” section on their Web sites, and a handful of top firms don’t even have Web sites (or just have a Web site with a login section for investors). But over the past five years, as competition for talent has intensified, a few firms have begun a more direct, focused search for talent. “Today, we’re still up there in terms of prestige, but we’re up against a lot of lucrative opportunities,” the managing director said. “So we have to go out and get ‘em young, and grow ‘em ourselves.”

Some of the best ways to find jobs in the industry include contacting PE firm managers directly; visiting industry, association, and social-media Web sites; joining professional associations; networking; attending industry conferences; participating in information interviews; and contacting recruiters (although recruiters typically don’t work with those with fewer than three years of experience.).

Start at the Top

You need to think big when it comes landing a job in the PE industry, and contacting PE firm founders is a big move that could give you the extra edge when it comes to landing a job. You can find the contact info for general partners (GP) at firm Web sites, on industry databases, or on LinkedIn and other social networking sites. When you make contact, get to the point. Your e-mails should be only a paragraph or so in length and your phone conversations should last a minute or less. Quickly detail what you want (e.g., an internship, a job, a referral, an information interview, a day of job shadowing). If the contact can’t help you, be prepared to ask him or her to refer you to others in the industry. The key is to keep the ball rolling by building your network and gaining experience, which will help you reach your ultimate goal: a job.

Check Out Industry-Specific Job-Search Resources

Many specialized Web sites provide information about the private equity industry, firms, and job leads. At some sites, you can even apply for jobs. Some popular Web sites and publications are:

Utilize Resources Offered by Professional Associations

Professional associations offer many job-search and continuing education resources—from job listings, networking opportunities, and certification to conferences, professional development classes and webinars, and publications. Some have LinkedIn and Facebook pages. For example, the American Investment Council (a membership organization for private equity, growth capital, and fund of funds firm) offers access to events and networking opportunities (including events hosted by its Young Professionals Network, https://www.investmentcouncil.org/ypn), industry research, and summaries of member firms. The Emerging Markets Private Equity Association (EMPEA) is a membership organization for fund managers, limited partners, general partners, and others who are affiliated with the private equity industry. Members can access networking opportunities (including receptions, happy hours, and executive briefings), receive discounts on international PE conferences, and receive free access to the organization’s Professional Development Webcast Series. In addition, the EMPEA provides internships to undergraduate and graduate students who are interested in learning more about emerging markets private equity, startup operations, and/or trade associations.

Get Some Experience

Most of the roles in private equity have counterparts in the larger financial sector, so the best way to aim for a private equity position is to gather the kind of experience the firms are looking for in the role you seek.

Most new hires in private equity firms come from the investment banking divisions of major Wall Street firms like Morgan Stanley. There, you’ll gain valuable experience and perspective on deal-making at a variety of levels and can see how both buyers and sellers in M&A manage their bids. You may even become involved in an M&A deal involving a private equity firm’s bid for the bank’s client, which not only provides valuable experience related to your future industry, but could also give you a few good contacts as well!

The majority of researchers and deal-makers come from investment banks, but those responsible for managing portfolio companies can run the gamut. Anyone who’s worked at a major company in areas of cost-cutting, business analysis, or operations is a good candidate for private equity firms as well. These people are sometimes drawn from the ranks of portfolio companies, but firms will also hire a proven cost-cutter or streamliner to oversee operations for a number of companies.

Researching Companies

Are you familiar with The Carlyle Group, TPG, and Warburg Pincus? You should be, if you’re interested in a career in private equity, because they’re three of the largest and most successful firms in the industry. How about the top PE firms that specialize in the technology sector or that are known for working in emerging markets such as India and Saudi Arabia? If you can’t answer these questions, you need to do some research because one of these firms could offer you a job someday.

Culture, work settings, sector focus (technology, health care, oil and gas, etc.), and investment strategies vary by firm, so it’s important to conduct extensive research to determine which firms are a good match for your educational and professional background, personality, and geographic location. You should learn all you possibly can about a firm before applying and/or interviewing there.

Start your research by visiting the Web sites of PE firms where you'd like to work. Some firms offer detailed descriptions of their history, departmental structure, practice areas, and key leaders—information that will prove useful during job interviews. Other sites may not have much more than a paragraph about the firm and a login section for investors. And Web sites of only the largest firms (such as Goldman Sachs, Brown Brothers Harriman, and The Blackstone Group) have comprehensive information on career paths, internships, and the interview process. Why? Because private equity firms don’t need to advertise; their doors are already being knocked down by people looking for jobs. That’s changing slowly as some of the larger firms develop formal internship and pre-MBA training programs.

Joining alternative investment associations (or using their resources if they don’t offer membership) is a good way to learn more about private equity firms via industry conferences, networking events, and publications. For example, the Emerging Markets Private Equity Association is a membership organization for fund managers, limited and general partners, institutional investors, and others who are affiliated with the private equity industry. It offers networking opportunities, sponsors industry forums and events, and provides other resources. You can view a list of its members at http://empea.org/members/list-of-members. Other national membership organizations include the Association of Asian American Investment Managers and the Association of Women in Alternative Investing. Don’t forget local and state-level organizations. For example, the Private Equity Association of Chicago—a membership organization for pre-MBA private equity professionals in Chicago—offers an annual recruiting forum, volunteer opportunities, and social events where members can network, as well as a list of its member firms, at its Web site, http://www.peachicago.com. Finally, visit the American Investment Council’s Web site, https://www.investmentcouncil.org/the-council/about-the-council, for a list of its approximately 35 member firms, which include some of the best-known and most-respected private equity players in the world.

You can also use industry databases to find information about private equity firms. Performing keyword searches in these databases will generate a list of employers that match your interests. Many databases can be accessed for free via trial memberships or at large public and university libraries. Here are a few to check out:

In addition, check out the following general business databases:

Checking out “best” or “top” company lists is another good way to identify potential employers. These lists provide rankings of firms by work environment, benefits, revenue, assets under management (AUM), and other factors. These companies are great starting points, but remember that “best company” lists feature only a small number of firms. Many other top PE firms aren’t included on these lists. You can learn about these firms through other methods, including networking and social media. Here are three best/top company lists to get you started:

Finally, social-media sites provide information about employers. SumZero (https://sumzero.com) is a social-media site for buy-side private equity, hedge fund, and mutual fund professionals. Members receive access to networking opportunities, research, job listings, and other resources. On LinkedIn, you can keep up to date with companies by following them, joining private equity groups to discuss the industry and private equity firms with fellow members, and contacting recruiters and people already employed by your target firms to schedule online or in-person information interviews. GlassDoor.com and other employment-related Web sites are valuable resources. At GlassDoor.com you can check out employee reviews of private equity firms as well as sample interview questions, analyses of the interview process, and salary offers. For example, as of this writing there are more than 110 reviews, 250 salary posts, and 25 interview summaries available for The Carlyle Group.

Networking

The key to finding a great job in private equity is networking. The so- called “old boys’ network” is alive and well throughout private equity, and who you know will get you in the door for at least an information interview.

Utilize Your Existing Networking Contacts

Begin by reaching out to your friends and family members to see if anyone you know works in the financial industry or knows someone who does so. You should also touch base with:

  • roommates/classmates from high school/college
  • coaches
  • teachers/professors
  • fellow athletes
  • fraternity/sorority members
  • current and past employers
  • neighbors/community members
  • members of your religious community
  • people you volunteer with
  • members of social organizations you’re involved in
  • members of professional associations
  • people who work in personnel departments or for placement or search agencies

Hopefully, these contacts will be able to connect you with private equity professionals or at least someone who works in the investment banking industry (a common starting point for PE professionals).

Use Your Alumni Office

Start with your college’s or MBA program’s alumni office. Schools love it when they’re known for producing top talent, so they’re very eager to help put you in contact with alumni who are willing to help you. Most MBA programs have at least one or two alumni working in the field, and the top programs will give you the pick of the bunch. When reaching out to these people, be polite and courteous, and recognize that they’re doing you a favor by even responding to your e-mail. Don’t rattle off a list of accomplishments when a handful will do. Keep it short and polite. And follow your school’s lead, too—if you’re given an e-mail address, use it. Don’t call the firm and ask for the person. If he or she wanted to be reached via phone, you would’ve been given a number.

Join Professional Societies and School Clubs

Whatever your specialty, there’s a society or association that can help you. Minority organizations are particularly helpful, as part of the industry’s overall mission is to get more minorities working on Wall Street. Again, be respectful and polite, and don’t waste anybody’s time.

Don’t forget school business, finance, and private equity clubs. For example, students who attend Dartmouth’s Tuck School of Business can join the Tuck Private Equity and Venture Capital Club (http://www.tuck.dartmouth.edu/mba/life-at-tuck/clubs-and-activities/career), a student-managed organization that helps further the education and interests of members through networking events, research and education programs, and speeches by industry leaders. Check with your school to see what types of clubs and programs are available.

Use Social-Networking Sites

Social-networking sites will help you to discover potential networking contacts, learn about potential employers, connect with recruiters and private equity professionals to set up information interviews (another excellent networking approach), and even apply for jobs. LinkedIn is the go-to site for anyone seeking to build his or her professional network. It has more than 2,000 interest groups for private equity professionals, including Hedge Fund, Private Equity & Alternative Investments Networking Group; Private Equity, M&A, and Venture Capital Investments; and the Private Equity Investment Group. Join a few of these groups to connect with members and learn more about firms and career paths, industry trends, and the job search. LinkedIn is free unless you want to sign up for an upgraded membership that allows you to send more InMails (LinkedIn’s version of e-mail) to potential networking contacts, view expanded profiles, and see more member profiles when you search.

SumZero (https://sumzero.com) is a social-media site for buy-side private equity, hedge fund, and mutual fund professionals. Members receive access to networking opportunities, job listings, and other resources.

Some private equity firms have pages on LinkedIn, Instagram, Facebook, Twitter, and other social-networking sites. For example, industry giant Bain Capital has a presence on LinkedIn, Facebook, and Twitter. Following Bain and other firms will help you to stay current with the industry and improve your chances of making networking contacts.

Participate in an Exploration Program

Some of the largest private equity firms offer exploratory programs, which allow students to learn more about the company and private equity industry, explore potential career paths, and build their network. For example, Goldman Sachs offers two- to three-day exploratory programs for specific groups of students such as first-generation college students, African Americans, Latino Americans, and women. Digital programs are also available for those who can’t attend on-site events.

During the on-site events, participants get the chance to meet Goldman Sachs employees and learn about their job duties, build relationships, and prepare for potential interviews with the firm. “Exploratory programs teach you how to talk (and walk) the talk,” explains a recruiter at the Goldman Sachs career Web site. “You may know Accounting 101, but understanding first-hand how we apply these concepts in our businesses can make the difference between an excellent interview and a strong one.”

Exploratory programs are also a good way for companies to identify the most-promising candidates for internships or possible full-time employment. “Any eligible student interested in careers in business should apply to our exploratory programs as this often serves as one of the first ways to get your name out there in our recruiting process,” explains the recruiter. “Last year, we had many people who applied, were not selected to attend an exploratory program, [but] later walked away with an internship opportunity.”

Volunteer

Mitt Romney’s 2008 presidential campaign generated a lot of unwanted publicity for the private equity industry. And stories of private equity takeovers that have adversely affected workers and companies have left the public with an often negative view of the industry. But contrary to public opinion, some PE professionals are doing great things to make the world a better place—from developing literacy programs and helping the homeless to supporting efforts to develop clean water, renewable energy, and sustainable businesses in developing countries. Volunteering at a nonprofit will allow you to connect with private equity professionals who want to make a difference in the world. If you work hard and are genuinely committed to a particular cause, you might get noticed and even be offered an internship or a job. Here are a few major private equity and alternative investment–related charities and professional organizations.

  • MBAs Without Borders is a signature initiative of PYXERA Global (http://www.pyxeraglobal.org/signature-initiatives/mbas-without-borders). According to its Web site, it “has strengthened and supported over 4,000 enterprises, entrepreneurs, governments, and nongovernmental organizations through pro bono consulting services” in more than 90 countries, including Morocco, Mozambique, Tanzania, Sri Lanka, India, Nepal, Equatorial Guinea, Mexico, Malawi, and Bhutan. The average MBAs Without Borders assignment lasts from three to 13 months.
  • The High Water Women Foundation (http://www.highwaterwomen.org) was founded by a small group of senior women from the hedge fund and investment communities. According to its Web site, “volunteers teach financial literacy classes to low-income youth, conduct career days, mentor at-risk women and youth, conduct computer skills, résumé writing, and job search workshops, support women trying to start small businesses, provide new backpacks to thousands of children in need as well as gifts for the holidays, and provide pro bono consulting services to domestic and international microfinance institutions and NGOs.” The High Water Women Foundation works primarily in New York City and the New York tri-state area.
  • 100 Women in Finance was founded in 2001 (as 100 Women in Hedge Funds). The organization (https://www.100women.org) has really taken off since then; it now has more than 15,000 members in 22 locations across three continents. 100 Women in Finance has raised more than $44 million for charities focused on women’s and family health, education, and mentoring. In addition to providing volunteer opportunities, it’s a great resource for career advice and support.
  • International Executive Service Corps (http://www.iesc.org) is a nonprofit that “supports and catalyzes the development of private enterprises, business support organizations, financial institutions, and public institutions.” It has implemented more than 25,000 short-term projects and 200+ programs in 137 countries. Paid and volunteer positions are available for financial industry professionals who want to make a difference in the world.

You can explore further volunteer opportunities at the following Web sites:

These strategies are good even if you’re well beyond your school years. But if you’re already working in the financial industry, you’ve got a leg up on everyone else. Chances are you’ve had contact with someone in your firm who’s had contact with private equity firms. Put your feelers out among your colleagues and see what happens. Be discreet, of course, unless you don’t mind your current boss knowing that you’re looking for a change. In some companies, going to your boss is actually the thing to do, since some bosses are good at networking on your behalf. But that’s a judgment call you’ll have to make based on your individual situation.

Finally, keep good notes and records of people you’ve met through the financial world. Get business cards, send thank-you e-mails, and do your best to keep in touch—without being a pest. For someone you’ve met at a conference, for example, and haven’t seen since, an e-mail every six months or so is a good way to say hello and keep the relationship going. For folks you’ve seen a little more regularly, a friendly e-mail once a quarter is effective. Any more than that, you’re probably dealing with them enough to not need a “remember me?” e-mail. Keep track of their movements throughout Wall Street, update them briefly on what you’ve been up to, and be sure to be helpful when you can. It seems like a lot of work, but done right, you’ll eventually know someone who knows someone who might have the ear of a Henry Kravis or Stephen Schwarzman. And that could lead to a job in private equity down the road.

Cover Letters

“The resume focuses on you and the past,” advises career expert Joyce Lain Kennedy in Cover Letters for Dummies. “The cover letter focuses on the employer and the future. Tell the hiring professional what you can do to benefit the organization in the future.” Good advice, but do hiring managers in the private equity industry even read cover letters? Short answer: the debate goes on. Some private equity recruiters say that cover letters are never read or, at times, not even requested by firms, while others report that hiring managers read them to get a valuable look at a candidate’s personality and soft skills. But unless you’re told to skip the cover letter (which Blackstone advises college applicants to do), you should submit one because it’s an additional way to convey information about your qualifications to a prospective employer. Or as Morgan Stanley says at its career Web site, “Your cover letter conveys three important things: You understand what the firm is looking for; you’ve got the skills; and you’re articulate.” For these and other reasons, it’s important to create a cover letter that’s compelling and answers the following questions:

  • Who are you?
  • What are your qualifications?
  • What you can do for this specific private equity manager and in this specific position?
  • What intangible skills and experience can you bring to the firm that other applicants don’t have?

The cover letter should feature a maximum of three short paragraphs.

  1. Paragraph #1 states who you are and what you will bring to the firm. Concisely list the scope of your experience, the number of years you’ve worked in the field, and the school you attended (if it’s a top-tier school) and your GPA. Paragraph #1 is also a good place to mention if you’ve been referred by another employee of the firm.
  2. Paragraph #2 explains how you will solve the employer’s problem. Provide one strong reason to convince the reader to move on to your resume. Link your skills and experience to the specifics of the job listing and the needs of the firm.
  3. Paragraph #3 is a call to action in which you thank the hiring manager for his or her consideration and say that you’ll be in contact to set up a time to discuss the job further. Many applicants are leery of appearing too aggressive, but the goal of your cover letter is to get noticed and get a job, so move the process along by asking for a meeting. Of course, you must be sure to follow up with the hiring manager to make the request.

Here are some general tips on creating a cover letter that will impress hiring professionals:

  • Never use the same cover letter to apply for multiple jobs. Each cover letter should be specially geared toward landing one particular position at one particular company. Consequently, it needs to emphasize the aspects of your education, personality, skills, and experience that make you the best candidate for the job. “You’d be surprised by how many times people forget to switch out the name of one firm for ours,” advises Morgan Stanley at its Web site. “Not only do we know you’re applying elsewhere, but it shows lack of attention to detail.”
  • Make the employer feel special by demonstrating your enthusiasm for the firm and your knowledge of its recent activities. You could say something like, “I have followed your company since I was in college, and I am very impressed with XYZ strategy or your LBO of XYZ company. I would love the chance to become part of your team and play a significant role in future acquisitions.”
  • Skip the generic recitation of skills. If the job listing asks for a detail-oriented analyst with leadership ability, for example, don’t just repeat these words, but provide short examples of how they apply to you. For example, detail-oriented = “In college, I organized a financial career seminar with 20 speakers and 500 attendees,” and leadership skills = “I served as vice president of my college’s MBA Student Private Equity Club.”   
  • Don’t repeat. “Don’t use the cover letter to repeat skills you’ve already outlined in the resume which speak specifically to the requirements in the job description,” advises Morgan Stanley.
  • Your cover letter needs to be error free. Errors suggest that you’re not detail oriented and don’t take the job-search process seriously. With so many people vying for each position, one simple mistake on your cover letter or resume could disqualify you from consideration. Avoid this fate by proofreading your documents multiple times and also having trusted friends or a career counselor at your college review them.
  • Use the name of an actual person in your salutation. No one at the firm is named “To whom it may concern” or “Dear Sir.” The online availability of the names of key players at firms gives you no excuse for using generic salutations. 
  • Don’t lie on your cover letter. Private equity is a high-stakes field, with hundreds of millions of dollars or more at risk when deals are made. No firm wants to hire someone whom they can’t trust. If you become a serious candidate for the job, your credentials will be examined closely, and being caught in a lie will, in most cases, disqualify you from consideration for the position you’re seeking.

Additional Resources:

Resumes

“Recruiters and employers will spend about 30 seconds or less reviewing your resume, so first impressions are crucial and the correct format is critical,” advises StreetofWalls.com. Here are some common attributes of successful private equity resumes:

  • Quantifiable results. If you’re an experienced private equity professional, hiring managers want to see how you added value to your last employer. You need to tell them the number and types of transactions you’ve participated in and the skills you acquired (e.g., valuation, project management, etc.). If you’re migrating from another industry (such as consulting or accounting), highlight your management consulting, financial, and project management skills; it also helps if you worked at one of the top accounting or consulting firms. If you’re still in college, detail how much money you managed as treasurer for your school’s private equity club, explain how your work as an intern researching potential acquisition targets saved the firm a specific amount of time, or even provide a summary of the strong returns you generated in a student investment club. 
  • Communication skills (especially if you work in investor relations). “The ability to write and speak well suggests that you will be successful working with clients and colleagues,” advises StreetofWalls.com. You can first demonstrate these traits by submitting a well-written cover letter and resume. Then provide examples from past jobs that emphasize your communication skills. Did you interact with clients or senior fund managers during a deal? Have you written any white papers or given any speeches that you can cite? You can also include recommendations from managers that tout your communication skills. If you’re still in college, you can mention the award that you received for winning a debate competition, include links to videos of successful speeches you made or school papers that you wrote, or provide recommendations from professors and internship coordinators that tout your communication skills.  
  • Teamwork skills. Being able to work with clients and colleagues is crucial for success in this industry. Hiring managers want to see that you’re a team player who can work well with others. To demonstrate this, accentuate your key roles in major deals; provide recommendations from former bosses (or internship coordinators and teachers, if you’re still a student), and mention your membership or participation in business clubs, professional-association committees, sports teams, study groups, and other organizations in which you demonstrated teamwork skills.   
  • Top-tier schools and well-known former employers. Your resume has to list the college you attended no matter what, but toot your horn extra loud if you attended a top-ranked university such as Harvard or another Ivy League school (and had a high GPA). Note any applicable classes you took (Financial Statement Analysis, Corporate Valuation, Restructuring, etc.) student clubs you joined, awards you won, and basically any activity or organization you took part in; this will show that you were highly engaged in your education. If you worked at prestigious employers, you’ll obviously list them, but, in addition, provide details on how you were an asset to each firm (e.g., participated in high-profile leveraged buyouts, saved the firm time or money, or otherwise helped solve a problem). 

Here are some additional tips from Blackstone and other private equity firms for creating a quality resume:

  • Limit your resume to one page. Include only information that will help you land that particular job. Hiring managers want to know quickly if you’re qualified and a good fit for employment at the firm.  
  • Place a “summary of qualifications” paragraph at the top of your resume. This is like an “elevator speech” on screen or paper. It’s better (especially for experienced PE professionals) to use a summary statement (rather than an objective) that briefly details one’s background (e.g., “investor relations specialist with 15 years of experience working at firms with a minimum of $750 million in assets under management”).
  • Don’t list every deal you’ve ever been involved in. Choose only the most representative (of your experience), well-known, and recent deals to provide hiring managers with an accurate and brief summary of your credentials. 
  • Be sure to include your GPA. “You should always include your GPA on your resume,” advises Blackstone at its Web site. “If you don’t include it, the person reviewing your resume will assume the worst. It is up to your discretion if you would like to include SAT scores. If you have strong scores for all three sections, it’s worth including.”
  • Make it perfect. “Check for grammar, spelling, and punctuation, but also look carefully for formatting issues,” advises StreetofWalls.com. “Be sure that headings are in the same type of font. If you bold print one date, bold print them all. You won’t get a second chance if your resume has careless errors.” Use the spell-check feature, but also ask a friend or teacher to review your resume for errors.   
  • Use keywords that are listed in the job announcement to ensure that your resume will remain in consideration after being subjected to scanning software used by many employers. 
  • Your resume content should be the same as what you post online at your LinkedIn page. If your titles and dates of work don’t match up, hiring managers might be confused or, worse yet, question your organizational skills or honesty.
  • Take advantage of help from employers. Large private equity firms, such as Blackstone, offers resume and interviewing workshops on college campuses to help students construct a strong resume, prepare for interviews, and navigate the recruiting process. These sessions are open to all students regardless of whether they plan to work at the company that hosts the session.   
Additional Resources:
Interviewing in This Industry

The interview is perhaps the most important part of the whole employment process. If you’ve gotten that far, it’s obvious to the firm that, on paper, you’re a viable candidate. This is your opportunity to stand out from that resume, and the resumes of everyone else who’s applied.

The interview process varies by firm, but all applicants will participate in a “fit” interview in which the candidate answers questions about his or her background or experience and the hiring manager assesses the candidate’s credentials and personality to see if he or she is a good match for the firm. Here are a few questions that you might be asked and how to respond:

  • Can you tell me about yourself?Don’t recite your life story but, instead talk about life experiences and skills that show that you will be successful on the job and a good fit for the position. Remember, your answer should be focused on getting the job, not on aspects that may be interesting to your friends or family, but not to an employer.
  • Can you describe yourself in three words? The recruiter is trying to see if you paid attention to the details in the job listing and understand the job. So, if the job is in investor relations, you might say “people-person, communicator, and good listener.” For a sales job, you might say “competitive, knowledgeable, and driven.” Be ready to provide concrete examples of how you exemplify these traits. Reviewing the company’s mission statement and core values can help you come up with some terms that will resonate with the recruiter.
  • What’s your biggest weakness? Never select a weakness that is a key competency for the job. For example, saying you are a poor communicator would be a red flag for a sales or investor relations position. You should also demonstrate that you have overcome or are trying to improve this weakness.

Some firms ask candidates to complete a paper LBO or walk through a case study. Junior candidates and recent MBAs can expect to be asked to complete modeling tests and personality assessments. Candidates who advance past these initial steps will often be taken out to lunch or dinner with senior team members, who will again assess their fit and ability to interact with coworkers and clients. As a general rule, the more experienced the candidate, the longer the interview process will be. Here is an overview of what the interview process is like at two well-known firms:

  • Brown Brothers Harriman (https://www.bbh.com): “The interview process will vary depending on the position. Typically, we begin with a telephone interview, followed by one or more days of on-site meetings with our recruiters and hiring managers. There is no established timeframe for the recruiting process; it lasts long enough for the firm and the candidate to learn about each other to make an informed decision.”
  • Blackstone (https://www.blackstone.com/careers/University): Applications for current or recent university students are due in June. Interviews are conducted from July through September. “Interviews are on-going at respective universities and in our offices around the globe. Full-time recruiting typically concludes by the end of October. First round interviews can occur virtually or in our offices. Candidates selected for additional interviews will be invited to the office for final rounds.”
  • Partners Group (https://jobs.partnersgroup.com): “Interviews are usually held over two stages and consist of a series of one-on-one interviews that give us the chance to get to know you and give you the chance to learn more about the firm and the respective opportunities. You will also be asked to complete a relevant case study. The aim is for you to gain a clearer picture of the responsibilities of the role, as well as the work environment at Partners Group, through speaking to existing employees.”
  • 3i (http://www.3i.com): “Our selection process varies by position and team. However, short-listed candidates can expect to have at least two interviews. For some positions and teams, selection may involve participation in an assessment centre or the completion of tests applicable to your position.”
Things to Remember

There are a handful of mistakes that, firms say, candidates make in their interviews. The first is projecting the kind of hot-shot aggressiveness that seems to be the Wall Street stereotype. That may be all well and good for a position on a trading desk, but private equity firms tend to prefer more cerebral, thoughtful candidates. Their investments are for the long haul, and they don’t invest lightly. Be strong and stick to your convictions, but don’t be cocky. Present yourself as an aggressive value seeker, but one who does his or her homework.

Secondly, remember who you’d be working for—the private equity fund’s shareholders and the firm itself, not the portfolio company. “The industry has a sort of PR campaign going that says we’re good for companies,” says one managing director of a small private equity firm. “We present ourselves as a hope for troubled companies, someone they can turn to. That’s all well and good, and it’s often true, but we’re there to find value and make money. Period.” So don’t make the mistake of putting a target or portfolio company’s interests ahead of the fund’s or firm’s. Especially with hypothetical questions, you need to at least discuss the various value opportunities in dismantling a portfolio company’s unprofitable divisions, spinning off pieces, or just closing up the whole company and selling the real estate it has for a profit.

Questions during an interview with a private equity firm tend to fall into four categories—your expertise, your knowledge, your character, and your vision and goals. The following are some samples of each.

Sample Expertise Questions

Tell me what you did in your last position that helped your company find value?

This goes to the very core of what it means to work for a private equity firm. You should be able to walk into an interview with four to five solid examples of how your actions directly saved your previous employers money. This could be from developing operational efficiencies to ferreting out information that helped save money on a M&A deal. Maybe your research helped a company develop a new product line, or your ideas spurred cost savings on benefits. Whatever it is, be prepared to talk frankly and in detail about how you are an agent of value creation.

What are you most proud of in your career to date?

This is another opportunity to talk about things you’ve done to help create value. It can be an investment you identified or a trend you spotted, or any of the things mentioned above. But make it a good one, and make it relevant to the private equity firm’s goals.

What’s been the most disappointing thing you’ve experienced in your career so far?

This is a very nice way of asking if you’ve learned from your mistakes. Nobody’s going to get it right all the time, and they’re going to want to know how you deal with adversity. Now, if your actions directly resulted in torpedoing a billion-dollar M&A deal … perhaps you may not want to mention that! But be prepared to talk about a project or deal that didn’t go as planned. Don’t blame others too much, either. Take responsibility for your part and explain how you’ve changed your approach since. Send the message that you learned something from the experience.

Sample Knowledge Questions

What do you think is going to happen to LBOs/M&A/private equity in the coming months and years?

You need to be up to speed on the state of major deals out there, financing, future growth, fund raising, the whole thing. Don’t be surprised if an article in The Wall Street Journal or The Deal from that very morning is mentioned, and be prepared to respond to it. Naturally, a reasonably bullish outlook for the industry is likely an asset—why else are you applying?—but don’t sugarcoat it, either. Talk about the challenges facing the industry in a reasonable way, how the industry might overcome them, and why you ultimately think the industry will continue to grow and prosper.

Is the market for mega-cap M&A/LBO deals done?

Another question having to do with your knowledge of current events. There was a point when the industry seemed to be poised for that $100 billion LBO deal. That may no longer be the case, at least over the next few years. Do your homework, read up on everything you can, and talk to contacts in the industry. Get a feel for the trends within private equity, and be able to talk intelligently about them.

Company X is a struggling retailer with prime real estate. Do you break it up and sell the land, or try to refresh the business?

You can expect at least one hypothetical question regarding your area of expertise during the interview, and probably another that has more focus and better elucidation than the one above. Know enough about the industry to mention a previous deal involving a similar situation and how you might handle things now.

Would you make an offer to buy a company at its current stock price?

No. You would not offer to buy a company at its current stock price because the current shareholders require a premium to be convinced to tender their shares. Premiums usually range from 10 percent to 30 percent.

What are the four basic ways to value a company?

  1. Market comparisons/trading comps/comparable companies: Metrics, such as multiples of revenue, earnings, and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) such as price-earnings ratio and enterprise value/EBITDA can be compared among companies operating in the same sector with similar business risks. Usually, a discount of 10 percent to 40 percent is applied to private companies due to the lack of liquidity of their shares.
  2. Precedents/acquisition comps: At what metrics (same as above) were similar companies acquired?
  3. Discounted cash flow: Based on the concept that value of the company equals the cash flows the company can produce in the future. An appropriate discount rate is used to calculate a net present value of projected cash flows.
  4. Leveraged buyout: Assuming an internal rate of return (usually 20 percent to 30 percent), what would a financial buyer be willing to pay? This usually provides a floor valuation.
Sample Personality Questions

What makes a good private equity deal-maker/fundraiser/researcher/associate?

This should be relatively easy. For most positions, it’s someone with an eye for opportunities to create value, developing plans to create value, executing said plans, etc. The whole point of a private equity firm is to wring as much value as one can out of an investment. And that should be the focus of your answer.

Why do you want to work in private equity?

Money, prestige, or a perception of the industry as the “next big thing” will get you shown the door. Of course, those already working in private equity would be lying if they said they didn’t enjoy those things. But ultimately, once the money’s in the bank and the person’s name is in boldface in the newspaper, the challenge is what keeps them coming back. Private equity, to those in the industry, represents the very pinnacle of investing. Turning around whole companies, finding value where there doesn’t appear to be any… these are what keep private equity folks in the game.

Alternatively, you’ll sometimes be asked why this firm. Know the firm, and know what makes it tick. Tailor your answer accordingly.

Where do you want to be in five years?

If you’re young and going after the equivalent of an analyst or associate position, feel free to talk about other opportunities. Perhaps you want to get an MBA if you don’t have one already, or even a doctorate. Perhaps you want to build on your experience and join a portfolio company. It’s good to have other ideas, but make sure that your position in private equity takes priority. It’s perfectly fine to say, “I don’t know, but I’m eager to find out what kind of opportunities would present themselves if I get the chance to work here.” If you’re older and applying for an experienced associate, VP, or managing director position, the firm isn’t going to want to hear anything other than a commitment to staying and growing with the firm. They’re potentially going to throw a lot of money at you, so reassure them that their return on investment will last a good long while.

Sample Vision Questions

What do you think this company does right, and what do you think we do wrong?

First off, a bit of a trick question here. The company doesn’t do anything wrong, it simply has areas in which it can improve. That said, you should be knowledgeable enough about the company and its recent deals to talk intelligently about how the company operates. Play up its strengths, certainly, but don’t be sycophantic. And don’t pull any punches on ways it can improve, but again, don’t be too negative.

Where are the next opportunities for private equity?

The answer to this depends on the position, of course. If you’re interested in fund raising, talk about new potential sources of funds, including any ideas floating around about public offerings and the like, or potential new sources of private placements. If you’re in deal-making or operations, be ready to discuss the trends you’ve read about recently, such as emerging market LBOs or a particular domestic sector. New financing plans are always welcome, too.

If you were given a chance to go after Company Y, would you take it, and what would you do with it?

Another hypothetical, with “company Y” likely a company in the news lately for various and sundry problems. If it’s a company with too much debt and not enough upside, feel free to say you wouldn’t take it. If it’s a company with a decent balance sheet and some operational problems, then talk about what you’d do. Ultimately, you’d have to be up on the news to consider whether there’s an opportunity to create value within the framework of an acquisition.

Your Turn: Questions You Should Ask

You should always walk in armed with questions about the company so that you can glean more information about your potential employer and they can come away with some appreciation that you’ve done your homework. That said, this won’t be the time to ask about benefits and pay—ask too early and you look greedy. Greed is good (at least to some people), but there’s a time and a place, and your initial interviewing at a firm isn’t the time, unless the subject is broached first.

Instead, ask smart questions about the company to learn more about how it does its business—and show that you know your stuff as well. It’s very important to have questions ready. “There is no excuse not to have any questions to ask the interviewer,” says Morgan Stanley at its career Web site. “We will always ask whether you have any questions. Even if we’ve answered everything you want to know, improvise and work off something that was mentioned in the interview and say that you’d like us to elaborate more on a particular aspect of the position.” Here are a few questions to ask during the interview:

Roughly, how many people do you hire each year? What’s the turnover like here?

This is a good basic question for any company, let alone one in private equity. This question gives you a sense of the rarity of openings, as well as how long people stay at the company. The demand for good private equity employees is strong, and anybody with private equity experience can go elsewhere for more money, so don’t get too alarmed if turnover seems a little higher than you might expect. That said, low turnover is a very good sign—people are making plenty of money, and the work keeps them interested and fulfilled.

How do you deal with the issue of employee retention?

Following the previous question, this is the sneaky way of asking about pay and benefits without actually asking. You’re likely to start a conversation about “aligning the interests of the company and employee” through various bonus programs and the like. You may also get a sense of the company’s culture, especially if they actually bring up things like work environment, corporate values and work/life balance. (Admittedly, work/life balance discussions will be rare—you won’t be expected to have a life.) Be wary of the interviewer who says he or she isn’t worried; every firm on Wall Street should be. There’s plenty of demand for top talent throughout high finance, and private equity firms are still up against tough competition from hedge funds, on the riskier side, and from more traditional Wall Street firms that may now be more averse to risk. You want to hear reassurance that this is a top priority for the firm.

How much do you plan to take advantage of the recent interest in private equity investing to grow the business?

Knowing the current mindset of private equity fund investors and the ebb and flow of the business is important, and this question shows you have some interest in that. This will also give you a sense of the strength of the company’s business and its future plans for expansion.

In your acquisition of Company X, you opted for Exit Strategy A instead of Exit Strategy B. Why is that?

Asking smart questions about recent or historical acquisitions is always a nice way to show off your research and intelligence, and also get a better sense of the company’s investing philosophy. That said, the key word here is smart. If you’re going to ask about any deals, know them cold, and ask specific questions. “Were you happy with the way Deal Y turned out?” is not going to make you look good, and the interviewer is going to sit back and say, “Well, sure.” But if you can ask a smart question about the financing structure of Deal Y, that will get your interviewer talking.

After the Interview

At the end of the interview, thank the interviewee for his or her time, and restate your interest in the position. Before you leave, clarify the next steps in the process. The hiring manager may have done so during the interview. But, if not, ask him or her to explain the next steps in the process and provide an estimate of when the company will be getting back to those who have been interviewed.

“You should write an individual e-mail to all interviewers following an interview,” advises Morgan Stanley at its Web site. “You can keep it short—a few sentences—that thank your interviewer and reiterate your interest in the position.” Consider also sending a written thank-you note. Doing so may help you to stand out in a group of equally-matched candidates.

Continue to network and apply for jobs while you wait to hear from the employer. Don’t quit your job search until you’ve received and accepted a job offer.

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