For many young professionals, standing out in a competitive private equity analyst job market can feel intimidating. Especially since there are so few roles for private equity juniors compared to roles in other areas of finance like investment banking. It is essential to prepare carefully for getting a junior role in private equity. At the analyst level, you aren’t expected to have lots of deal experience but you are expected to have an analytical mindset, technical skills in Excel, particularly for modeling, and a general willingness to learn or demonstrated interest in becoming an investor. Here are a few tips on how to stand out in a competitive private equity analyst job market.
Identify your unique skill set
One of the best ways to stand out in any job market is to focus your energy inward and identify your unique skill set. In other words, determine what you bring to the table that others can’t or won’t. This can vary depending on your circumstances. For example, if you come from a particular industry group in investment banking, whether that be consumer, energy, healthcare, or something else, play to the strengths you have within that particular industry. If you’re interviewing for a generalist fund or a fund with a slightly different industry, this can also apply in those situations. Interviewers want to see that you are developing expertise in something and that something can be either directly or tangentially related to what they do. What matters is that you can speak to what you are an expert in and show how it relates to becoming a great investor using their fund’s strategy. In my experience, I was part of the Natural Resources group in investment banking and was able to directly apply my learnings to interviewing for a role at an infrastructure private equity firm.
Apart from the group you work in, everyone has skills that set them apart. Sometimes it requires digging a bit deeper to find them. For example, when I was going through the interview process, I knew that I might not be the best in Excel or have a lot of deal experience, so I played to my strengths of being a strong presenter and having a deep understanding of the fund’s strategy and current investments in the portfolio. While my model test passed the firm’s bar, I knew that my unique skill set would put me ahead of other potential analysts who also passed the technical skills tests. If possible, take the time to find your unique skill set before you begin the formal recruiting process. If you are actively recruiting, make this a priority before your next few interviews so that you can present yourself as a highly competitive candidate.
Networking is key
Another way to stand out in a competitive market is to form genuine connections with people who work at the firms you are interested in and in the industry in general. Even if you are not actively recruiting, having coffee chats with experts in the industry can help you learn about current trends and what their expectations are for the junior teams they work with.
Before you go through the formal recruiting process (whether that be on-cycle or off-cycle), you should try to speak with as many associates or directors who work at the firms that you’re interested in. This can be through LinkedIn outreach, mutual friends or colleagues, school alumni, or people who have previously worked at the bank (consulting firm, etc.) you’re at. Ask them questions about their work, their professional path, and most importantly, what they like about the people they work with and what the expectations are at work. If they are an analyst or associate, they can tell you exactly what you need to do in order to excel in that role. If they are a director or higher, they can give you insight into the caliber of work they expect to receive and give you hints as to what you can highlight in your interviews as skills that you already have.
Nail the model test
Most, if not all, private equity interviews will have a model test. The timing may differ, as some firms use it as a screen during the first or second interaction with candidates while other firms choose to do the model test later on once they’ve screened the candidate with behavioral questions. As an analyst, you might not be very familiar with leveraged buyout (LBO) modeling, so this is important to practice before you start to interview seriously. There isn’t really a way around mastering the modeling test besides lots of time and practice. Remember, you can use the models on OfficeHours and coaches to step through elements of the modeling test that might be more unfamiliar or confusing to you.
Besides the mechanics of building the actual model, the most important aspects of the test to master are the assumptions you use for transaction entry and exit, growth, and returns. Some firms will have some sort of debrief after you take the modeling test where you will be asked to present your model (and investment thesis if you built the model from a CIM) to a member of the investment team. It is important to practice presenting a model before your interview and learn how to pull key pieces of information from a CIM so that you can support your company’s transaction multiple, growth, and other assumptions.
Practice your interview questions
Lastly, this one might be somewhat obvious, but practicing your behavioral interview questions is essential to stand out in a competitive job market. A lot of people can teach themselves an LBO and create one that is up to the standard of the firms they are interviewing at, but not everyone can tell a compelling story of why they want to work in private equity or speak about experiences on their deal teams in their current job. If you can focus on some of these key behavioral questions throughout your interview prep, you have a better chance of standing out than people who rush to formulate these answers. Take the time to dig deep into some of these questions and draw on examples from your current and past professional experience, extracurriculars you were involved in during college, and anything else relevant that is unique to you and your experiences.
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