While the most common path to getting into private equity is working in a field like investment banking first for a few years, more and more private equity firms are offering internships for undergraduates and MBA students. Many of which can convert into full-time offers. Landing a private equity internship can kickstart your career in other ways as well, as the deal experience and connections you would make during the internship will serve you well in other roles and may lead to a role at that firm in the future if that’s what you are interested in. Currently, the firms that offer internships are largely megafunds and some smaller industry-specific funds (tech, infrastructure, etc), but as the industry is evolving, more opportunities to get into private equity firms without following the traditional IB path are arising. Here are just a few benefits of a private equity internship and how they can benefit your career.
Test if you like private equity/investing
Like any internship in a specific field, interning at a private equity firm is a great way to test if you like the day-to-day job in private equity and if investing in general appeals to you. When I was in undergrad, I didn’t intern at a private equity firm but I did intern at an endowment, which gave me exposure to thinking like an investor. While we were not directly investing in companies, it made me realize that being an investor was something I liked and could see myself doing for many years. I compared that experience to my time in banking and understood that there is a big difference between being an advisor (banker) and an investor (PE professional) in terms of the day-to-day work and overall impact on companies and industries. A private equity internship can help you narrow down your career options going forward.
As an intern, you also have the opportunity to network with professionals who have worked extensively in private equity and get a sense of why they like the job. You can ask questions about their career progression over coffee chats and determine whether the job would be a good fit for you based on their personality and career path. You can ask them what they would have done differently or what advice they have for you on things to avoid / ways to accelerate your career, especially if you are looking to get to where they are one day.
Build up hands-on deal experience
The main role of a private equity intern is to support the analyst/associate you are working for. As an intern you may be working for multiple juniors on multiple teams over 3-6 months, so you will get exposure to a variety of processes. Some of your responsibilities will be core to getting a deal started, such as reading the confidential information memorandum (CIM) alongside the analyst/associate and formulating your qualitative view on the business. You may also help with working on the financial model or sending in Q&A based on a review of the data room if the process is live. You will run everything by your analyst/associate before you submit to seniors or the sell-side, but try to be proactive about asking if you can take the first pass at diligence items or other administrative to-dos that will need to be done throughout the deal process. If you are unsure about what you can help with, ask your analyst/associate to walk you through the firm’s deal process so you know what to expect next. You may also get to help with portfolio management for existing investments, which can give you a sense of if you enjoy operating and improving companies, another important part of working in private equity.
Learn concrete technical and soft skills
At both the undergraduate and MBA levels, you will get a lot of practice with Excel, PowerPoint, writing emails, and formulating investment theses of your own as a private equity intern. This is a great opportunity to learn these skills before many of your peers might, especially since you as the intern may get the opportunity to present findings to seniors at the firm. For example, my firm has an internship program for college juniors, and we ask them to find an investment in a space they’re interested in and present their thesis to partners at the firm. In the presentation, they have to include an evaluation of the market, competition, management, growth potential, and a preliminary valuation. We ask them to make pages in Powerpoint that are up to our investment committee standards and practice presenting. All of the skills gained through this process will serve them well in future internships and they will have a leg up over peers who haven’t had the opportunity to do such analysis and present to experts in the industry.
Learn office etiquette early
This point may apply more to undergraduates as MBA students will likely have had prior work experience, but can also apply if MBA students haven’t worked in finance before. Some of the intricacies of working in finance can only really be learned through hands-on work, particularly in the office. A lot of private equity firms don’t have the same facetime culture as investment banks, but seniors still like to be able to engage with juniors at the firm in person and have an open door policy at many firms. As a private equity intern, you can begin to understand what dynamics are like in a firm’s office and what you can do to maximize your good impression on everyone in the office.
Especially at the undergraduate level, interns may not have had work experience so learning to work is a lot different than learning to be a student. Managing work deliverables can feel a bit more overwhelming since you can’t manage your time as flexibly as you could in school, so getting adjusted to that earlier than your peers who haven’t interned in private equity is a huge benefit. Also, learning the lingo of being an investor takes time, so starting earlier in private equity gives you time to absorb how to use those words and how people tend to describe investment opportunities in private equity (i.e. the buzzwords they use, the typical trends they look for, what risks should always be presented). This will benefit you professionally and with any personal finance pursuits.
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