Tips to Gain a Successful Entry into Private Equity
Tips to Gain a Successful Entry into Private Equity. Private Equity firms are picky in screening candidates and take every precaution to obtain the best hires. Know how PE firms recruit candidates here.
Finding your career niche or a direction to move forward is easy when you have a goal in mind. It could be a career in finance, gaining entry into NASA, music school, or any field that might interest you. Let’s narrow down to finance and talk about careers in private equity, the most sought-after career in the finance sector here.
The top private equity firms hire people straight out of college, professionals who have worked in an investment bank for at least two years, and MBA graduates from top business schools. They tend to hire prospective candidates who are very young in their careers so they can apprentice and train them easily.
Many of the US Private Equity firms grow talent-in-house. If you have financial-modeling skills and basic knowledge of corporate finance, you can build from there. Due diligence, knowing what questions to ask with the clients, understanding how to look at downside risk, how to interview the client or any other big shots of a company – them for the industry.
These private equity firms’ numbers are trim and as such, they expect to get the most possible out of their employees. Moreover, they have few job positions as compared to investment banking or stockbroking. Securing a job in this field requires due diligence, analytical skills, creativity, some experience in investment banking, and networking.
Let us see how you can make your path into the private equity industry here.
Depend on recruiting firms
Many of the PE firms do not handle human resources in-house. They depend on third-party recruiting firms to handle most of their positions. The recruiting firms carry out the major recruiting functions like screening of resumes, shortlisting candidates, conducting the first round of interviews, background verification, drug testing, and other mandatories.
You may get in touch with the actual PE firm executives at some point during the interview process and you have a very small window to create an impression. Before that, you stay acquainted with the recruiting firm alone.
These firms may not always depend on the LinkedIn profile or any other popular job portals to get their desired candidates. It is necessary to initiate contact with the headhunters by emailing your resume and having a prompt follow up. Perseverance is the key to success here.
No matter how qualified you are, the private equity industry will not call a person for an interview on Monday and ask to work from the following Friday. The hiring process may take a year or more, so your patience level should be high.
It is incredibly advantageous to have a strong connection with professionals. PE sector is competitive and it is worth spending your time in knowing people working for private equity or people who have connections in the industry. Referrals play an important role to get our foot in the door.
Become an investment banker
PE firms look for experienced candidates. During graduation, apply for every internship that relates to private equity. Many times, an internship might fetch you a job in private equity. If not, become an investment banker. It helps you to get acquainted with skills like debt financing, financing modeling, the process of creating capital, and other skills that you can apply in PE firms. It is recommended to acquire at least two years of experience in investment banking.
Alternatively, you can try to become a strategy consultant where you learn management, networking, and negotiation skills.
In a nutshell, it is necessary to gain additional skills that PE firms might need apart from the knowledge gained in the university. Therefore, when starting your career search in PE, be affirmative to gain work experience and added skills. You need practice before you enter the real market.