A “public” take on a Private Equity affair

I met a friend recently whom I had helped earlier get a job as a Trader. Hellos led to coffee and a general discussion about our experiences working with Hedge Fund & PE professionals. He asked me what differences I see in both the industries and my reply was spontaneous & honest:

PE is mostly a people driven space while Trading is more technology driven.

After that I decided to pen down an abridged version of my learnings & observations so far:

While the adrenaline rush and the ferocity with which you communicate gives you an edge when you are a trader, it’s a balanced IQ & EQ which will make you a hit in a Private equity domain. There could be high frequency or Algorithmic-trading firms where human involvement is least, whilst in PE, technology is used for the VERY way it was invented… To supplement and NOT to supplant!!  I feel blessed to have met some really amazing people in both the industries and in some ways could clearly cut out certain personality traits in both. I am going to focus on PE more since I am recruiting for this space now.

Up & close with Private Equity

PE funds have small teams so they are usually extremely picky. In spite of having fewer layers & hierarchy the process is long because you will be scanned thoroughly on a LOT of perimeters. Of course you are getting interviewed because they want some more contributors to the bottom line of the fund in any possible way but trust me only talking about numbers will not lead you anywhere close to an offer.

They prefer REAL people centric profiles:

 

  • Those who understand deeply- both psychology and numbers (they invest in people & ideas) AND
  • Those who can hold an intelligent discussion with a broader perspective and don’t come across as number crunching robots AND
  • Those who understand that meeting a person in this domain is actually a long term relationship (you might even end up co-investing or in a GP/LP relationship) and if you play your cards well with sincerity and articulate well, you will be a part of one of the most well paid (and also well behaved in my experience) industries AND
  • Those who are extremely number friendly and much more people friendly

 

During your interaction/interviews:

Normally 75% of the interview process is anticipated; unpredictable part is the case study and the modelling tests. Having a strong commercial instinct is an essential attribute since the process is not only about technical skills but also about case studies, testing how commercial and astute you are in your approach to an investment opportunity.

All said and done the process will be all around:

 

  • YOUR deals: You are expected to know your deals inside out. Deal specifics, financials, reasoning, structure, valuation, process, modelling, your exact role in the deals etc.
  • THEIR deals: Do go through their website at least, read the recent news and learn a few deals the fund has made and your thoughts on those deals
  • DEALS for them: People with entrepreneurial mind-set are usually a good fit in PE and its always good to go equipped with some investment ideas that you can methodically explain to the interviewer
  • As I mentioned team play is a very important aspect; some internet stalking (LinkedIn etc.) would give you some colour on the backgrounds of the team and you can get a fair idea about their ethos.
  • The way you present yourself cannot be underrated. Formal attire (not too dressed up either), firm handshake, humble but not overfriendly, chin-up but not arrogant are the basics that play some subtle role as well.

I still smile thinking about what a candidate jokingly told me that entering a PE is like getting married where not only your financial stability (your ability to work with & generate numbers) but also your behaviour and commitment is scanned by the whole clan!!

Deepika is a principal consultant at Funds Partnership specializing in Private Equity opportunities in the APAC region. She can be contacted on +852 34783960 or email Deepika@fundspartnership.com

 

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