What it takes to get a job in private equity

Gail McManus

“Getting a job in private equity is not the same as doing a job in private equity. They’re not actually evenly related.”

So said Gail McManus, managing director at executive search firm PER,  during last month’s webinar, What does it take to get a job in private equity?

McManus went on: “I’m sure all of you have worked with people in your careers where you thought, ‘Why have they got this job?’ Well actually, it’s not because they are any good at doing it, because clearly they’re not. But what they were very good at was getting the job.”

Surely it was one of the more winsome observations to come out of a program chock full of practical advice for private equity job seekers.

Moderating the program was Aunnie Patton Power, an associate fellow and entrepreneur in residence at the Skoll Centre for Social Entrepreneurship at University of Oxford’s Saïd Business School. Also speaking: Ludovic Phalippou, a professor of financial economics at Saïd Business School; and Erin Sarret, director at alternative investments money manager StepStone Group, where she specializes in investor relations.

Below I summarize the best of their advice:

  • Become a master of each stage of the famously arduous private equity job-hiring process. Said McManus. “If any of you have ever played on a PlayStation game, this is about getting it right at every level.” At each level your goal is to move forward to the next level. Did your CV fail to impress? It isn’t that you didn’t land the position, she said. You didn’t get the interview.
  • Adapt as you go. “If your CV doesn’t get you an interview, change your CV,” McManus said. “If you don’t get past the first round, think about what you’re doing in the first round and change it…If you don’t get through the case study, then you’ve really go to think about your approach to case studies.” She added: “You’ve got to win at every level.”
  • Don’t be another me-to resume. “That is the worst thing you can do,” said  Sarret. “This is a high-profile industry, and we’re looking for somebody different.”She added: “The more you look like somebody else, the less chance you have of getting the job.”
  • Know that PE professionals decide quickly. They’ll spend 30 seconds reading your CV. It needs to answer the basic questions in as few words as possible using big fonts, lots of white space, and no spelling mistakes. “If it doesn’t jump out and it doesn’t speak to them, you missed it,” Sarret said.
  • Consider CVs a piece of packaging. “I call it the label on a bottle of red wine,” said McManus. “When I go to the supermarket on a Friday night after a long week at work, and I’m looking at two bottles of red wine, and they’re both the same price, How do I choose? I choose by the label. I choose the one that appeals to me. The red wine might be better in the other bottle but I will never know, because I didn’t take it off the shelf.”
  • During the interviews, talk like a buyer, not a seller. Describing a retail business with good prospects, a seller might describe it as a fantastic company that plans to open 100 outlets over the next 12 months before going public. Describing the same business, a buyer might say that if the management team can make good on its plan to roll out 100 outlets over the next 12 months–and that’s a big if–then it might be a good investment. Said McManus: “It’s about the language you use and the perspective you have.” The buyer is going to have to own the business and try to make money.
  • Speak the language of private equity. Private equity professionals “detect someone who’s not from [their] world very very quickly,” said Ludovic. How does the carry waterfall work?  You need to know that, and if not, you’re out, he said.
  • Show your passion for improving businesses, not just doing deals.  Sure, you’ll have to show that you’ve mastered Excel pivot tables and that you can run LBO models in your sleep. But businesses are run by real people, and real people make countless mistakes as they try to grow their companies, said McManus. Private equity firms look for deal professionals who can support management teams with sound advice, investment banking no-how, industry connections and resources.
  • Don’t take the question, Why do you want to do private equity? at face value. What the interviewer wants to know is, What do you bring to the firm?  “The answer to that question has to be something that is absolutely and uniquely you,” said McManus. Can you help the firm expand its media investments outside the United States? Can you solve outsourcing problems for portfolio companies? That’s the kind of thing they’re looking for. Don’t make the mistake of saying that this is the next logical step in your career, or that you’re looking to move to the buyside. This question is about what you bring to the table to help the firm make money.
  • Don’t fall into common traps on the case study. One of the most common reasons candidates fail the case study round is that they fail to focus on what’s important, said McManus. In assessing strengths and weaknesses of a business, for example, the misguided candidate puts down every single thing she can think of. What matters is the top three or maybe the top six. “The most important thing is the most important thing,” said McManus. Another pitfall: not following instructions. “If it says build a quarterly model, build a quarterly model, not a monthly one,” said McManus. “Do exactly as they tell you, no more no less.” Finally, don’t forget to turn the paper over. “There will be stuff on the back that you need to know.”






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