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02-26-2023 Newsletter: Why You Should Make A Move Before Associate (Megafund Coach’s Thoughts) | Protected Saturdays

Private Equity

Private equity recruiting is very confusing, likely due to the fact that you need to process a lot of information in a short amount of time. You have to learn a lot in terms of volume and need to learn how to do work quickly which leaves fairly limited time and opportunities for introspection and self-evaluation. Because the private equity recruiting process happens so early, you’ll notice that a lot of your peers in banking will often be unprepared come time for on-cycle or off-cycle recruiting and will often miss the process altogether. When you are working hard on grueling pitch decks and deal work in banking, it is really easy to postpone your need to study for private equity interviews and the recruiting process. You are going to be tired, exhausted, and mentally have little in the tank. Believe me, I get it; I was in your shoes. However, if you are one of those folks who thinks that it is okay to leave recruiting until later on in your banking career, as in beyond the associate promotion, I want to offer you my advice to reconsider your approach. A seemingly short-term decision may have long-term effects in your career and being thoughtful in your approach to recruiting will pay dividends in your future career path.



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Simply put, the longer you leave private equity recruiting off for, the harder the process becomes. It is functionally similar to the results you get from procrastination. The workload doesn’t go anywhere and you just feel worse than you did before procrastinating. Additionally, if you are interested in a career in private equity and don’t really care much about banking, you are delaying the inevitable and just making it harder for yourself in the short-term. Think about it this way, during the on-cycle recruiting process, you are competing against many investment banking analysts who are generally just starting their first job out of university, and have minimal understanding of the financial landscape and what their job truly entails. This is the nature of on-cycle and to a lesser extent off-cycle recruiting your first year in banking – for those that are prepared enough, this is an advantage, as you may be able to punch above your weight simply by knowing more than your peers and appearing more polished; for those who are unprepared, this is going to make you seem pretty generic and will affect your chances of getting an offer. Moreover, once on-cycle is done, there are just fewer spots remaining at “well-known” shops. This is a fact.


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I understand a lot of firms are pulling back on on-cycle recruiting but this is generally not true of the majority of established, large-cap firms. If you leave recruiting for later, there are just going to be fewer of these opportunities left, since they will fill up during on-cycle. Considering how much some megafund shops are paying now, you would also be leaving serious money on the table due to a lack of unpreparedness. To the extent these seats are not filled up, during off-cycle, you will be competing against people who have had more experience to prepare for their interviews and had more time to prepare for recruiting. This means that the potential applicant pool is likely far more competitive for fewer spots – which means it’s going to be harder for you to place and even more difficult if you are already an associate.



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Beyond just the timing of recruiting, you need to understand how the business model of private equity works. Private equity roles are inherently more specialized and as you get more and more senior, you begin to develop a more targeted expertise. As such, if you go to recruit for private equity as a Vice President in investment banking, you are going to have a pretty tough time, since the pool of candidates they would be likely to hire is experienced private equity professionals, who may have at least had some associate experience in the industry. I would consider this the biggest risk. When you recruit after your associate promotion, you may be essentially competing against other experienced private equity hires – who likely be heavily favored based on their experience by headhunters and firms alike. After all, who wants to go through the arduous task of re-training a new hire? No one! Will everyone you are competing against be experienced? No – but again, you are just making the potential recruiting process harder for yourself.




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