2020 has been an atypical year, to say the least. How does this affect PE recruiting? Here are five key considerations if you are interested in pursuing a career in private equity post banking.
1. Recruiting has been delayed
Typically, on-cycle PE recruiting begins in the fall. First-year analysts who just hit the desk are competing for PE Associate jobs that won’t start for another two years.
PE interviews are notoriously rigorous. If you aren’t fully committed to recruiting, it will be impossible to get the offer. This is tough because, after only a few months on the job, it’s hard to commit to a career two years out. You simply won’t have enough data points to conclusively decide which direction you want to take your career. It’s important to learn as much as you can about the industry by doing your research and speaking with people on the job before you commit.
On-cycle PE recruiting kicked off in September last year. In 2020, it’s safe to say things aren’t going to happen as they have in the past. Nevertheless, we’ve seen headhunters recently kickoff a handful of off-cycle processes, and we expect on-cycle recruiting to start up again in early 2021.
2. On-cycle vs. off-cycle recruiting
On-cycle recruiting has historically occurred during an investment banking analyst’s first year. As the war for talent continues, PE firms rush to lock up the best candidates as soon as possible, lest they lose talent to their competitors. Mega-funds typically kick-off their processes in the fall and firm up their associate class for two years out within a week. In PE recruiting world, Mega-funds are the first domino to fall, which kicks off the recruiting scramble. Upper middle-markets and middle-market firms soon follow suit.
However, some PE firms aren’t in a rush to give out offers so far in advance. They would rather interview more experienced analysts who can bring more to the table. This is often because smaller PE firms don’t have the same training resources of full-service investment banks / their hiring needs follow a different cadence. Off-cycle recruiting is more ad-hoc and start dates tend to be more immediate. You could enter an off-cycle process in November and start your new job by January 2021.
3. Headhunters are the gatekeepers to private equity jobs
Unlike investment banks, which manage their own recruiting processes, PE firms usually outsource their recruiting function to headhunters. Headhunters are the gatekeepers to PE jobs. Some of the established firms include CPI, Henkel, SG Partners, Dynamics, Amity, and Glocap. If you want a PE job, odds are that you will have to go through the headhunter channel.
Headhunters will reach out to banks and groups with a strong track record of placement. Top bulge brackets and elite boutiques receive a lot of headhunter love, including Goldman Sachs TMT, Morgan Stanley M&A, Evercore, etc. If this describes you, you’ve probably already received some outreach emails or even had a few screening calls already. If you haven’t, a proactive approach may be your best bet.
4. Know your story inside and out
Amidst a sea of analyst resumes, it’s hard to stand out. Recruiters look at resumes and quickly screen for your bank, group, school, GPA, and standardized test scores. They may even glance at your interests. If you meet the bar by working at a target bank, you’ll likely get through to the headhunter screen. Assuming you impress them and have the right background, you’ll be put in front of PE firms for a first-round interview – usually over the phone (even in a pre-COVID world).
If you are fortunate enough to get the interview, you must differentiate yourself from other candidates by making it abundantly clear to your interviewers that it’s a no brainer you should be in PE. You need to connect the dots in your life experience to show that PE is, without a doubt, your next logical step.
This is extremely important because there are plenty of impressive candidates who ace the modeling test and also show complete dedication to PE during the interviews. There’s no room for ambiguity here – crafting your story and rehearsing it to perfection is critical.
5. Interview preparation
While uncertainty remains a key theme in 2020, it is best to focus your energies on factors within your control.
Recruiting will kick off imminently, and it is best to be fully prepared. The competition will be fierce due to a pent-up supply of first and even second-year analysts who are standing by on the sidelines waiting for post-COVID recruiting to kick off. In the more immediate term, your resume should be ready to go. It is the first and sometimes the only point of contact that will determine whether you get an interview. Next, focus on knowing your “story” and making it abundantly obvious why PE is the logical next step. Third, speak to headhunters so they can present you with interesting opportunities. Fourth, focus on behavioral and technical interview prep. We especially recommend mock interviews with experienced PE professionals to get accurate and immediate feedback.
OfficeHours has a roster of coaches from 100+ private equity firms who can help you land a job. We have placed numerous candidates into private equity from non-traditional banking backgrounds (even during quarantine). We are eager to meet you!