Private Equity Skills

What Skills Students Should Learn for Private Equity

I’ve been traveling for the last three weeks and during the flights I have been going through some white papers that I’d been meaning to read.  One particularly interesting paper is by a professor at Stetson University titled “Understanding the Skills Needed for Careers in Private Equity Investing.”  The research identifies a major disconnect between general finance education and that needed for investing in private equity.

Although many professionals receive a general business school education and work one or two years at an investment bank or other finance firm, it would be great if an MBA included a more focused study on private equity to prepare graduates for a very unique field.  There are signs of a shift toward educating students on private equity is the Tuck School of Business’s Center for Private Equity and Entrepreneurship as well as the University of North Carolina’s Kenan-Flagler Private Equity Fund which is largely run by students.  I hope that more research is done to show how students and business schools would benefit from a curriculum with a strong focus on private equity.

It’s crucial that students at least have a basic understanding of how to value companies, structure a deal, complete accurate due diligence, manage a portfolio and negotiate with investors and keep them satisfied.  The price for on-the-job training for a venture capitalist could be millions of dollars from your investors, so it’s important to have a curriculum that addresses specific skills necessary for working in private equity.  The skills that private equity professionals should have beyond the existing MBA and finance degree curriculum are:

1. Being able to realistically value businesses in an illiquid start-up context 
2. Contractually structuring the investment
3. Maintaining an effective personal network to both ensure adequate deal flow, and also assist  portfolio companies in securing critical resources
4. Possess the negotiating skills associated with both purchasing and selling an investment
5. Be able to coordinating thorough and effective due diligence

If you have not developed these skills or your business school has not addressed these needs, the author prescribes ways to improve these crucial areas:

1. Do not rely on the “general business requirements” to meet these skills.  
2. Some of these skills are process skills, meaning that they are developed by practice – not merely through understanding the process.   
3. Due diligence is on virtually no one’s curriculum.  There are great books available and free resources online to give you at least a surface knowledge of this area. 
4. A course in private equity investing can be demonstrated to accomplish the purposes of the business capstone class, and might be offered in lieu of Strategic Management, for example.

To read the full white paper, see here.

See our private equity career guide for more information on what you need to succeed in private equity

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Tags: private equity career, advice, skills, white paper, investments, skills needed, valuation, education, tuck school of business, due diligence, strategy, structuring, price, learning, education in private equity, buyouts

Private Equity Job Market

Update on the Private Equity Job Market

It is possible to find a job in private equity but it isn’t easy, according to Abby Adlerman of Russell Reynolds Associates, a leading executive recruiter. There are a few industries that are actively seeking new talent although a lot of this hiring is focused on the portfolio management side.

Private equity firms are hiring very selectively on the principle level. On the portfolio side, operations managers and executives are in high demand as private equity firms focus exclusively on their portfolio companies. Distressed credit investing and secondary purchases are two areas of high-demand as well. Additionally, renewable energy and infrastructure are expanding and requiring a lot of new talent. Alderman estimates that experience is the most sought-after quality during this rough time for private equity.

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Tags: Private Equity Job Market, Private Equity Jobs, Private Equity Career, Private Equity Job openings, Private Equity market, Private Equity Careers, Buyout jobs, Portfolio management

Career Mistakes

Top Five Career Mistakes to Avoid

There is a fine line between between being competitive while pursuing a job and annoying the potential employer. The following is an explanation the top five career mistakes that you should avoid. It is targeted toward professionals in the finance and investing industry which is highly competitive and many people’s enthusiasm for getting the job leads them to commit errors that ruin their chances. I receive lots of applications from people looking to enter the private equity industry and almost all of these applicants (although well-meaning) unknowingly makes at least one of these mistakes.

Here are five very common mistakes:

1. Don’t be annoying. Annoying may seem a bit harsh but I don’t know how else to describe ten e-mails confirming that you received the first e-mail. By pursuing a hirer or recruiter too aggressively he will want to give you a shot even less rather than catching his attention.
2. Don’t be overconfident. Confidence is healthy and necessary especially in the business world but being overconfident to the point you claim to know everything begs the obvious question, “then why would I hire you, shouldn’t you hire me?” Especially for entry-level positions, this is the wrong attitude. You should be eager to learn more about the industry from those with experience. You send the wrong message by marketing yourself as better than everyone and imply that you are a no-it-all.
3. No long resumes or emails. Resumes should be kept short. I understand that you want to highlight all the qualifications and attributes that make you the right candidate for the job but the people who read your resume are busy and want it written concisely and clearly. For a guide to writing a quality resume see Private Equity Resume. The same applies to emails, I know of people (myself sometimes included) who will stop reading emails because they are epic essays that do not have a clear objective. The best emails are brief and to the point.
4. Generic is boring. You have to separate yourself from the other hundreds of emails or applications. By trying to appear well-rounded you sometimes underplay your specific abilities and areas of expertise. There are thousands of people with finance experience who want to work in private equity so you have to differentiate yourself from the herd. Employers want to hire people that fill a specific void in that private equity firm.
5. Passion is not enough. This is a lesson for those applicants who think that passion alone can get them in the door. I’ve seen this first hand with internship applicants with e-mails like “Working in private equity is my dream! I love the industry; it’s so exciting…” It’s great that you’re excited about the industry and employers do look for people passionate about the industry but often people will little qualifications or experience use this enthusiasm as a way of compensating. Employers see through this so back up your communications with something stronger than exclamation points.

Here is Richard Wilson explaining these mistakes:

Popular private equity articles:

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4. Service Provider Directory

Tags: private equity jobs, private equity career mistakes, private equity career, private equity job market, private equity job mistakes, career mistakes, career mistakes to avoid, private equity career advice

Private Equity Job Market

Tips for Entering the Private Equity Job Market

Many Private Equity Blogger readers are MBA students/recent graduates or professionals hoping to make the switch from another finance career to private equity. I have made a point to update the site with as many resources as possible related to private equity careers. For other Private Equity Blogger career resources please refer to the list at the bottom of this post.

Speakers for the recent private equity and venture capital conference at the Harvard Business School cautioned that today, MBA grads need to have some patience–along with good grades and experience. Those who graduate with a Masters in Business Administration are faced with a very adverse private equity job market, perhaps only rivaled by the burst of the tech bubble. Many firms are imposing a freeze on hiring or even cutting jobs–see Carlyle cuts 10% of staff. This leads Rob Go, a senior associate with Boston-based VC firm Spark Capital, to warn, “Think about the funds that you want to join and then think out two to three or four years.”

Interestingly, the private equity industry speakers suggested that hopefuls turn to alternate routes rather than focusing only on private equity, such as with the government or within a start-up:

“If I were looking for a job, I’d work at [the Department of Energy] for a few years and then come out and [find] a clean tech firm that has to penetrate those [regulatory] networks,” said Craig Driscoll, a partner at Lexington, Mass., venture capital firm Highland Capital Partners LLC.

Another suggestion was to make an effort to separate yourself from the other job candidates with special skills: “Take an unconventional path and be okay failing,” said Josh Wolfe, co-founder of Lux Capital Management, a New York venture capital firm. “Running with the herd made sense with the vast majority of the evolutionary past, but it doesn’t make a lot of sense in an investment world.”

The moderator of the event, a partner and head of a New York-based private equity recruiter, similarly spoke of thinking outside the box by seeking positions besides an analyst or partner. Instead, he advises to look into investor relations or risk management for private equity firms because positions such as the CFO or COO for a large firm can be highly lucrative and rewarding.

Although the panelists cautioned against working at a second- and third-tier private equity firm, they concluded on an optimistic note, with one VC remarking: “In 2001 to 2003, we saw MBAs with anxiety, but that vintage of MBAs has turned out pretty well. The people that have been through a crisis come out more battle hardened.”

For other articles on private equity careers and jobs visit the following links:

• Complete Private Equity Jobs Guide
• Finding a private equity job
• Private equity job salaries
• Private Equity and Hedge Fund Jobs

Source

Tags: Private equity jobs, private equity, private equity careers, private equity job market, private equity job placement, private equity job, private equity career, finding a private equity job

Private Equity and Hedge Funds Jobs

Private Equity and Hedge Funds Jobs Resource

Private Equity Jobs is a resource for individuals interested in entering the private equity and hedge fund industry, as well as those existing private equity and hedge fund professionals who want to manage their future and view possible job opportunities. The website was started in March 2008 by a veteran recruiter with over ten years experience in the alternative investment space.

Private Equity Jobs uses a pre-qualifying method on candidates individually reviewing every candidate’s background to ensure all community members possess the requisite educational background and work experience that is necessary for a job in the private equity or hedge fund industry. Currently, Private Equity Jobs more than 10,000 of these pre-qualified professionals its database. Private Equity Jobs offers weekly newsletters and job bursts to disseminate relevant real-time industry information, private equity and hedge fund job hiring news and career management tools. Since its inception Private Equity Jobs has hosted both front- and back-office positions, including job postings for Portfolio Managers, Partners, Principals, Quantitative Analysts, CFOs, COOs and Investment Associates.

Future of Private Equity Jobs

• Private Equity Jobs hopes to launch a monthy webinars and the site is currently composing a compensation survey.
• Although it has a single site now, Private Equity Jobs hopes to launch at least twenty more within the hedge fund and private equity industry over the next two years.
• The majority of listings on Private Equity Jobs are based in the U.S. but the site is working to expand its listings of non-U.S. based positions.

In light of the volatile market, Private Equity Jobs now offers a new pricing structure for job postings. Presently, the site offers a 30 day job posting for $199 instead of the previous fee of $350. Non-U.S. based job postings are only $99 for 30 days.

Related Article: Free Private Equity Career Guide

Tags: Private Equity Jobs, Private Equity Jobs Resource, Privat Equity Jobs Database, Private Equity and Hedge Fund Jobs, Private Equity, Hedge Funds, Private Equity Career, Finding a Private Equity Job

A job in private equity can be both challenging and highly rewarding, which explains the very competitive private equity job competition. So, gaining an advantage through articles, advice from professionals and research is increasingly valuable in finding a private equity job. If you are looking for a job, please see our Alternative Investments Jobs.

I am often contacted by young professionals who are eager to get a job with a private equity firm and want to know what it takes to get there. Landing a job in this industry is no simple feat but with the right credentials, a great work ethic and dedication to working in private equity it is possible. I have compiled a free guide to help people interested in working in private equity with some knowledge that I can share as well as other resources that I have found helpful. I will be updating this guide to make it very comprehensive and a great tool for finding a private equity job.

If you would like to have a job listing posted on Alternative Investments Jobs, please e-mail me at Theo@PEblogger.com

Private Equity Job Opportunities

• Private equity MBA: Here is an article on how private equity is attracting MBA graduates.
• Resume writing: This article provides tips for writing a resume with a focus on private equity careers.
• Private equity associate: A private equity associate is the typical entry-level position for MBA graduates and this shows what that position entails.
• Private equity partner: The private equity partner is a sought-after position in private equity firms, this is a overview of the qualifications and duties of a partner at a private equity firm.
• Venture Capital Associate: This article emphasizes the associate position at a venture capital firm.
• Private Equity Positions: A general overview of the different positions at a private equity firm.
• Private Equity Job Database: This is a collection of job database websites.

Tags: Private equity jobs, private equity job, private equity jobs guide, guide to private equity jobs, private equity career, private equity careers, private equity, private equity resume, getting a job in private equity

Private Equity Internship

Accepting Applicants for Private Equity Internship

Searching for a private equity internship? If you are interested in learning more about private equity and would like to apply for an unpaid intern position, send me your resume and what area of private equity you are most interested in. Let me know what type of internship you would like (time commitment and type of work) and I will try to find a position aligned with your preferences.

This internship is not working directly in a private equity firm, however the experience gained can be beneficial for eventually entering the private equity industry. If you put in the effort and the time, you are guaranteed to have a better understanding of the private equity industry and stay current on trends and norms that will help you as a professional in the industry as you apply for a private equity job. I look forward to speaking with you.

Permanent Link: Private Equity Internship

Tags: Private equity internship, private equity career, private equity internships, internship opportunity private equity, private equity job, private equity unpaid internship

Boston Private Equity

List of Boston Private Equity Firms

Boston is a center for private equity in the U.S., especially in the private equity boom over the last few years private equity has established itself in the Boston business community. Through big local buyouts like that of Toy’s R Us by a Boston private equity group, Bain Capital, and an expanding Boston market for those bigger buyouts but also smaller venture capital deals, Boston’s private equity market has grown substantially.

While New York remains a relatively unchallenged hub for private equity activity, Boston is certainly among the top private equity cities in the country. Although the major private equity groups in Boston compete amongst themselves, they also work together on large deals. This is evident in the recent acquisition of Warner Music Co that was led by two Boston private equity firms, Bain Capital and Thomas H. Lee Partners.

The growth of private equity in Boston has been largely accelerated by the success of large Boston private equity firms like Bain Capital, Thomas H. Lee Partners, TA Associates, Berkshire Partners and Summit Partners. In addition to the more well-known Boston Private equity firms, here is a list of Boston private equity firms that will be updated in hopes of creating a very comprehensive resource for those interested in Boston private equity.

Here is the list of Boston private equity firms:

• Advent International
• Audax Group
  
• Bain Capital LLC
• Berkshire Partners
• Boston Capital Ventures
• Boston Community Capital
• Boston Community Venture Fund
• Boston Millenia Partners
• Boston Ventures
• Calera Capital
  
• Charlesbank
  
• Great Hill Partners
  
• Heritage Partners
• IDG Ventures Boston
• J.W. Childs Associates , L.P.
• Lincolnshire Management
  
• Morgenthaler
• Summit Partners
  
• TA Associates
  
• Thomas H. Lee Partners
• Weston Presidio
  

If you represent a Boston private equity firm and would like to be added to the list or you know of a Boston private equity group that is not listed please send an e-mail to Theo@peoblogger.com

Permanent Link: Boston Private Equity

Tags: Boston Private Equity, Boston Private Equity Firms, Boston Private Equity Groups, Private Equity in Boston, Venture Capital Boston, Boston Venture Capital, Private Equity Boston

Private Equity Resume

Private Equity Resume Advice

Writing a private equity resume is unique from other resumes because it generally requires experience in finance as a prerequisite for being considered for a position in private equity, so here is an article with suggestions on how to compose a great resume.

I just found a great article on crafting the ideal private equity resume from Mergers and Inquisitions. The presumption is that the applicant has worked in the investment banking sector or currently works as an investment banker. Another presumption is that you hold an MBA from a good school, these two elements are not necessarily required but they are highly recommended for entering the private equity industry.

Here are some tips from M&I as well as my own on creating a great private equity resume:

1. Resume Appearance: There is no excuse for a poorly written or incorrectly structured resume. If you are having trouble composing your resume seek help. There are a lot of resources that can help you make a winning resume. Here are just a few:
• Contact your old professors, or better yet, speak with someone who has a job in private equity. Even if you’re confident in your resume it doesn’t hurt to have it edited by someone you respect.
• Look online for guidelines to writing a resume, but be careful to get your advice from qualified sources like Vault which focuses specifically on business careers.
• Check out a career advice book to get good tips on writing a resume, it may seem like a lot of work but resumes are your first impression with your employer, why not put in the extra effort?
2. Focus on Professional Experience: While other employers in other industries focus on academic standing, personality and other things, not strictly your professional experience, private equity is different. A potential employer wants to know everything about what you’ve done at your former job, so don’t spare any details that can help you appear as experienced as possible. There is a reason that private equity firms want to hire people that have worked in investment banking or a similar financial area for at least two years: they don’t want train you, they want a prepared associate who is experienced enough to enter private equity and immediately produce results. Showing significant work experience by emphasizing the deals you worked on and how you contributed are key in this resume. Here are some key elements to highlight when explaining your past work experience:
• The number of deals you have worked on
• The types of deals you have worked on – M&A (sellside and buyside), IPOs, Follow-Ons, Convertibles, Debt
• The skills you gained – LBO modeling, accretion/dilution modeling, DCF skills, valuation.
3. How to Write About Your Deals: The key for writing about your past deals that you’ve been involved in is to be unique and demonstrate how you specifically influenced and contributed to the deal process. Rather than just listing your duties that you carried out during the deal process, specifically mention how you helped in the deal. M&I has a great example of what NOT to do and then a re-write of what to do:

• Poor example:
• $5B Sale Of Company Y To Company X
  • Drafted Offering Memorandum and Management Presentation and tracked status of deal with potential buyers
  • Managed due diligence process between Company Y and different buyers and responded to all inquiries
• Better example:
• 5B Sale Of Company Y To Company X
• Worked directly with CFO to build complex operating model of company involving 40 different properties across multiple states
• Created market analysis showing favorable trends in casino construction despite subprime-related problems; led to 2 private equity buyers remaining in the auction process until the final round

I hope this is helpful while you compose your resume and remember that while it can be tedious, this is an important step on your way to entering the rewarding private equity industry.

Permanent Link: Private Equity Resume

Tags: Private Equity Resume, Private Equity, Private Equity Job Resume, Private Equity Career Advice, Private Equity Career, Private Equity Resume Tips

Private Equity Salary Cut

Salary of Private Equity Dealmakers Could Drop 75%

The trouble in the financial sector inevitably promotes caution in the private equity industry, especially among buyout firms and some believe that this will cause major reductions in the salaries paid to dealmakers at buyout firms. Bloomberg news reports that private equity salaries could face major reductions–as high as a 75% cut–as a result of the credit crunch.

British financier Guy Hands makes the projection based on the idea that private equity deals will have a longer life than before–an average of 8 years–as firms exercise more caution. This would inevitably lead to huge cuts in the salary of private equity dealmakers who have been compensated very well in the past as more buyouts were executed. Hands believes that the current economic crisis will force private equity firms to reevaluate their strategy and focus on safer, more long-term focused deals–a sharp departure from the way buyout firms have operated up until this economic decline.

“Compensation for everyone in the financial services industry is clearly going to fall over the next few years,” Mr. Hands told Bloomberg. “This will be particularly true for private equity general partners who are having the reduction, both because of the time it takes to invest and because of the time it takes to harvest.”

Source: Bloomberg

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Tags: Private Equity Compensation, Private Equity Salary, Private Equity Salaries, Private Equity Management, Private Equity

Private Equity Firm: Partner

The Role of a Partner at a Private Equity Firm

The position of Partner at a private equity firm is a coveted one, and with reason. The private equity Partner is rewarded significantly higher compensation than associates (although they are paid very well too). The logic behind the dramatic pay increase is that a Partner has significant abilities in judging deals, managing employees and generating high profits for the firm.

Partners at private equity firms take on a wide range of responsibilities, but the Partner has four primary duties:

• Managing the Partnership and Operations: Typically Senior Partners oversee the overall productivity and performance of the firm and its employees and the day-to-day operational tasks are assigned to the other Partners. The degree in which each partner specializes in a certain area varies by the firm’s size and reach.
• Sourcing Deals: The majority of deals come from Partners, who use their extensive investment knowledge and experience in the industry, as well as their numerous contacts to find potential investment opportunities. In this way, Partners play a pivotal role in searching out and executing deals for the private equity firm.
• Supervising Investments: The degree that Partners are involved in the firm’s investments varies by deal but generally Partners take on at least a small role in monitoring the investment. This could be only a minimal hand in the company, such as a seat on the investment’s board. In other cases, the Partner takes on a very active role in the life of the investment by managing the operational aspects of an acquired company. The Partner’s involvement in the investment is meant to ensure its continued success which hopefully translates to profits for the private equity firm.
• Partner Relations: Finding new Limited Partners and maintaining good relationships with existing Limited Partners is another important duty of Partners. This is crucial for Partners because bad relations with investors could translate to a capital drought for the firm’s private equity funds.

While these duties are the most time-consuming and have the highest priority, a Partner must also make time to keep up on industry trends and stay ahead of the competition. Through trade shows, private equity forums and industry publications a Partner is able to keep up with the ever-evolving private equity industry. Another task is the mentoring of the young talent by overseeing their work with helpful criticism and advice, which has a two-fold benefit of increasing the efficiency of the firm through the Associates and grooming future management.

As you can see, Partners have a great deal of influence over the success of a private equity firm and therefore Partners are the top-tier of business professionals. The position is difficult but the compensation makes it well worth the effort for most Partners and the allure of a Senior Partner position makes the Partner role an envied rank in private equity firms.

For more info: Tuck Center for Private Equity

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Tags: Private Equity Firm Partner, Private Equity Partner, Private Equity, Private Equity Careers, Private Equity Positions, Private Equity Jobs, Partner at a Private Equity Firm

Private Equity Recruitment

Private Equity and Venture Capital Recruitment

If you are searching for qualified private equity recruits for your firm or, on the other side, if you are hoping to connect with a private equity firm then Private Equity Recruitment is a great tool.

Unlike the broad financial recruitment websites, this resource specializes exclusively on the venture capital and private equity industry. One major benefit is the international reach of Private Equity Recruitment Ltd. which spans globally including Asia and the Middle East.
Another benefit is the size of the agency, Private Equity Recruitment hosts more jobs on their website than any other private equity recruiter in the UK and Europe. This is a valuable resource for professionals interested in entering the private equity and venture capital industry.

Until I can correct the link problem for e-mail subscribers, here is the URL for Private Equity Recruitment: http://www.perecruit.com/

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Tags: Private Equity Recruitment, Private Equity Recruiting, Private Equity Recruiters, Private Equity and Venture Capital Recruitment

Professional Networking

Private Equity and Venture Capital Networking Tips

The private equity job market is very competitive and it may be difficult to break into the industry. While a large part of securing an interview at a private equity or venture capital firm is having the proper credentials (i.e. MBA and financial work experience), another important aspect is networking.

By putting in some extra work networking you make a contact who leads you to a job opening, or you may just learn valuable tips from other private equity or venture capital professionals. No matter your field, networking is critical for advancing in the financial world. Here are a few basic networking opportunities you may have overlooked:

• Linkedin.com: The biggest and probably the best networking website is LinkedIn. This website’s sole purpose is to connect professionals and make business contacts, so having an updated and active LinkedIn account is an easy networking tool that often leads to great contacts. Make sure that your profile is professional and shows all your skills and past work experience. A photo will lend some personality to your profile too. Join the private equity linkedin group, if you haven’t already.

• Facebook.com: Another networking website that is Facebook. Although Facebook has a more social networking focus, many business people use this site as a tool for professional networking. Word of caution: if you use Facebook for its social features, like connecting with college friends, then make sure there are no comments or photos on your profile that you wouldn’t be comfortable with a potential employer seeing.

• IFA Life: A reader suggested another networking tool, IFA Life,a new professional networking website for financial planners and investment professionals. The site is predominantly in the U.K. but is expanding to the U.S. too.

• Join forums: The internet provides so many opportunities to connect with other private equity and venture capital industry contacts, and forums are great for this. The Private Equity Forum is connected to the 9,000+ member private equity group and is a good place to ask questions and meet people. There are also many forums exclusive to venture capital or angel investing.

• Attend events: I live in New York City so there is always a networking event or private equity lecture to attend. This goes for most major cities too, especially areas with major financial sectors like Chicago and Boston. Sites like this, are great for keeping up with events. Also, check out online conferences “webinars” that are often led by well-known speakers.

These are some basic but great opportunities to make other contacts and become more familiar with the private equity industry. If you have any suggestions for other professional networking opportunities please send an email to Theo@peblogger.com

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Tags: Private equity networking, networking private equity, private equity networking opportunities, private equity, professional networking, how to network in private equity

Private Equity Positions

Positions in Private Equity

If you’re considering applying for a job in private equity, here is a brief introduction.

Private equity jobs are typically separated by primary areas: number crunching; appraising and executing deals; and originating deals.

“The Number Crunchers”

The number crunching area consists of the junior staff. These employees are usually offered short two year contracts and their main duty is to analyze potential investments. The number crunchers look at the accounts of the companies that the fund is considering and constructing financial models for calculating how much these companies are worth.

Appraising and Executing Deals

After the number crunchers finish calculating and analyzing the investments, the next set of people take over the deal. These people, sometimes called the principals, take the information that the number crunchers gathered and decide whether the investment is beneficial to the firm and what the price should be set at. If these people decide that the investment works for the private equity firm then they help execute the deal.

“Originators”

This leads to the “originators” who are more senior than those who appraise the deals. These people are typically the fund’s partners and their responsibility is to oversee the deal while it is being executed. Their duties also include originating new deals by finding more companies to invest in. These people use their senior status to build relationships with top executives in companies, possibly using that connection to coordinate a deal later. After the deal has been completed, the principals and partners nurture the company. This nurturing role may involve a position on the company board and advising a strategy that will lead to increased profits.

Necessary Skills for a Job in Private Equity

In order to be seriously considered at any position in a private equity firm, you generally need an excellent academic record–usually an MBA from a quality university. In addition, many recruiters want professional experience of at least a year in investment banking or a relevant industry. The salaries in the private equity industry ranges by position, but data suggests that private equity compensation is exceptionally high.

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Tags: Private equity jobs, jobs in private equity, private equity careers, careers in private equity

Private Equity MBA

Private Equity is a Top Destination for MBAs

Private equity is a top destination for business school graduates because it carries some great benefits and private equity is a challenging, rewarding atmosphere for bright young talent.

A story by the Wall Street Journal suggests that the biggest incentive is monetary. The lowest-level employees at private equity firms earn on average $215,000 a year. That salary increased 29% from the previous year, so MBAs can expect to begin their private equity career earning a high three figure salary.

The emergence of hedge funds may also benefit MBAs breaking into the private equity industry by providing competition for buyout firms. Private equity recruiters have responded to hedge fund competition by increasing incentives offered to MBAs, hoping to retain their access to the elite recruitment pool. Private equity firm managers have spread the carried interest–the profit private equity firms receive from buyout deals–among the lower-level positions in firms. In comparison to the 29% pay increase from 2006 to 2007, firm managers’ salaries only increased by 9.3%. Although some predict a decline in private equity, it will certainly remain a top destination for young MBAs.

WSJ source

For more on private equity MBAs see the list of The Top Private Equity Education Programs

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Tags: Private equity MBA, Private equity MBAs, MBA graduates, private equity jobs, private equity business school

Private Equity Networking

Tips on How to Network In Private Equity

These are some of my favorite more general private equity networking tips. Networking is an especially important for private equity, because no matter which aspect you are involved in so much of the work is personal. It’s all about who you know; whether it is finding potential investors or meeting entrepreneurs. So here are some basic but helpful private equity networking tips, I’ll be adding more in the future:

1. Be aware of the impression you make- Are you someone who gives help or advice for the sake of helping out another professional or are you someone who looks only to advance yourself? If you are greedy and care only for your personal success you will come off as such a person and people will not want to do business with you. Building relationships that benefit both parties will ultimately reward you in return.
2. Be excited about what you do- When you’re talking to other professionals you don’t want to complain about your job or talk about the least attractive aspects of it. You should be excited and therefore exciting to listen to so that your audience wants to know you and possibly even do business with you.
3. Prepare and practice your self-introduction- Of course you understand your job but you have to be able to explain clearly what you do and what makes that interesting. Sometimes first impressions really are everything, so eloquently and confidently introducing yourself is a crucial aspect of networking.
4. Anticipate rejection and overcome it- Not everyone is going to be interested, so take rejection in stride and move on to better prospects. I appreciate rejection because then I don’t waste my time on someone who isn’t really interested so I can find someone who is.
5. Bring business cards…everywhere- You never know where you are going to meet a contact so bring business cards anywhere you go. Sometimes I find myself making a great contact at a friend’s dinner party or sitting next to me on an airplane.
6. Repeat People’s First Names- This plays to the more personal side of networking, where you are building more personal business relationships. Thanks to David Drake of LDJ Capital for this addition.

These are just a few of my favorite networking tips, if you have some other networking tips you’d like to share please send me an e-mail at Theo@peblogger.com.

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Tags: Private equity networking, private equity, networking in private equity, private equity networking tips, tips for private equity networking

Private Equity Associate

Private Equity Associate Skills

A private equity associate is the typical entry-level position for MBA graduates. An associate candidate should be able to perform at all stages of the deal, from making the deal to operations and even fund raising.

A worthy candidate should possess three core skills:

1. Technical skills- Firms often specialize in a certain sector or domain. An associate’s responsibility is to gain expertize in that area.
2. Analytical skills- Associates must be able to understand business models, research and collect relevant data, and conduct an extensive analysis on potential investments. Most MBA programs should prepare candidates for this area of the job to a small extent, but further self-preparation is recommended.
3. Interpersonal skills- Not only are interpersonal skills important for succeeding in the firm, a large part of a private equity associate’s job is networking with contacts–from investors to service providers. Interpersonal skills are essential for success in the private equity industry.

Private equity associates are expected to interpret data rapidly, interpret it effectively and come up with a conclusion. Although an associate’s duties vary by firm, that any associate should possess.

Permanent Link: Private Equity Associate

Tags: Private Equity Associate, private equity careers, private equity, private equity associate skills, finding a job as an associate

Venture Capital Job Interview Questions

Possible Venture Capital Interview Questions-Part 3

With any interview you want to be prepared, and being prepared means understanding the industry which you are trying to enter and the type of employee that industry recruiters are searching for. Via Vault, here are some possible questions that you may encounter during a venture capital interview. This is the third and final addition to a series that is split into three areas: expertise, venture capital process and personality. If you missed them, here is Part 1 and Part 2.

Personality questions - These questions are more general and apply to most job interviews.

1. Where do you want to be in five years? If you are applying pre-MBA be sure to say that you hope to obtain an MBA by that time and be working in the venture capital industry.
   
2. Would you ever want to be an entrepreneur? If you are pre-MBA it’s okay to say yes because it’s pretty typical for young professionals to be more open to entrepreneurship, but it’s more tricky if you are trying to get a partner-track position. In that case it is usually better to downplay any desire to be an entrepreneur because firms hiring for a partner-track position want someone dedicated exclusively to that position and bringing in a lot of money.
3. What will you do if you don’t get a job here or in the venture capital industry? Express your desire to work within the venture capital industry, but if that doesn’t work out you would try elsewhere in private equity or a related field.
   
4. What did you like about your old job and why did you leave? I have been asked this question at every interview I have had, so be ready. This is a good opportunity to express your excitement for working in venture capital. Tell how other jobs just weren’t satisfying and venture capital seems like the best match for your personality (here’s an opportunity to name your strengths). Don’t complain too much about your past job, you may come off as a difficult or bitter person.
   
5. What’s the thing you are most proud of? Have some great stories that highlight your abilities, it’s okay to brag a bit here.

Permanent Link: Possible Venture Capital Interview Questions-Part 3

Venture Capital Career Articles:
Venture Capital Interview Questions 1
Venture Capital Interview Questions 2
Venture Capital Interview

Tags: Venture Capital, Venture Capital Career, Venture Capital Interview, Venture Capital Job Guide, Getting a Job In Venture Capital

Venture Capital Job Interview Questions

Possible Venture Capital Interview Questions-Part 2

With any interview you want to be prepared, and being prepared means understanding the industry which you are trying to enter and the type of employee that industry recruiters are searching for. Via Vault, here are some possible questions that you may encounter during a venture capital interview. This is the second part of a series that is split into three parts: expertise, venture capital process and personality. Click here for part 1.

Process Questions - This section allows you to prove that you are a capable candidate for a position in venture capital.

1. How do you value an investment? Say that you would value the investment low as low as possible while still working out a deal with the entrepreneur. Using several methods you would arrive at a number and begin discussions with the entrepreneur based off that number. Figure out the ideal, realistic return that your firm could get from the investment and what is the lowest money you would need to invest to get that ideal return. Be well versed in measuring an investment’s worth because it is a critical aspect of venture capital and you can really stand out if you do your homework.
2. When you evaluate a business plan, what’s the most critical element you look for? A pretty safe answer is management, how well a company is operates under management is a crucial factor to consider for an investor.
   
3. Why do you want to work at a venture capital firm? This may seem obvious: do not mention money or trendiness.
   
4. Would you want to invest in companies geographically near or far from our offices? You want to keep the companies you invest in near your venture capital firm’s offices so that monitoring and support is easy and available. But although that is the ideal arrangement, you should be open to distant companies as new opportunities for expanding the firm and to be able to capitalize on companies that are being overlooked by your competitors because of the geographical challenge.
5. What investment areas do you find interesting? Be honest, find out what area really appeals to you then do some research on that area. It’s always better to be honest rather than just feeding the venture capitalists what they wants to hear. Many of them are able to see through this, so just be excited and well-versed in your favorite area.
6. Do you have any questions for me? This is a golden opportunity for you to separate yourself from other candidates, use it well. Research the history of the venture capital firm including past investments, management staff and performance. Ask about the firm’s past investments, maybe why the firm invested in ”x” investment or why they didn’t. A big theme for this section is just do your homework, understand the venture capital firm well enough that your questions reflect your knowledge.
   

Permanent Link: Possible Venture Capital Interview Questions-Part 2

Tags: Venture Capital, Venture Capital Career, Venture Capital Interview, Venture Capital Job Guide, Getting a Job In Venture Capital

Venture Capital Job Interview Questions

Possible Venture Capital Interview Questions-Part 1

With any interview you want to be prepared, and being prepared means understanding the industry which you are trying to enter and the type of employee that industry recruiters are searching for. Via Vault, here are some possible questions that you may encounter during a venture capital interview. This is the first of a series that is split into three parts: expertise, venture capital process and personality.

Expertise Questions – Be prepared to answer questions about your past working experiences and things you learned from those experiences.

1. What are the major trends in your industry? - Start by explaining the big picture, highlighting the most apparent causes and effects showing that you can explain trends and understand market forces. Then finish with more detailed and subtle factors effecting the industry that you learned exclusively through your past positions.
2. Can you explain why your former company took the path they did? Give more insight to show that you were actively involved in the company.
3. When you did that project, did you use a certain technology? Be prepared to cover all the past jobs listed on your resume and mention specifics on how each project or company succeeded.
   
4. What companies in your industry might make interesting investments? This is a pretty standard question for venture capital interviews so be ready with detailed ideas.

Permanent Link: Venture Capital Job Interview Questions – Part 1

Tags: Venture Capital, Venture Capital Career, Venture Capital Interview, Venture Capital Job Guide, Getting a Job In Venture Capital

A chartered alternative investment analyst (CAIA) is a designation awarded to qualified investment professionals that pass the CAIA program.

How to Become a CAIA?
To become a CAIA you must satisfy three requirements:

1. Complete the CAIA Program which encompasses hedge funds, private equity, real estate commodities and managed futures. The course is divided into Level 1 and Level 2. Level 1 focuses more on the analytical aspect of investing and managing. Level 2 puts the skills gained from the first level into practice with decision-making exercises and risk management techniques. This is all geared toward developing a better understanding of both the technical and practical aspects of alternative investing. The program is administered by the CAIA Association.
2. Another requirement for becoming a CAIA is that the candidate has professional experience (full-time employment within the bank regulatory, banking and financial or related fields). This can be either: A.) One year professional experience and a bachelor’s degree OR B.) Four years professional experience.
3. Finally, in order to become a CAIA the candidate must complete the online Membership Agreement, provide 2 professional references, and pay membership dues.

Richard Wilson, who is also starting a Chartered Hedge Fund Associate program, shares some tips here on passing the CAIA program and a breakdown of how it’s scored.

In a shaky private equity industry, a Forbes article suggests a survival instinct has kicked in for private equity firms.

Of course, capital is the primary focus of private equity firms, but in order to survive in these uncertain financial times many have shifted their focus to human capital. Strong leadership will likely be the difference between a collapsing firm and a successful one. So having capable veteran executives has become a vital element in private equity. But how do firms find a worthy candidate? Ana Dutra heads the leadership development division for executive recruiter Korn/Ferry International and she confesses that finding the best candidate is not an exact science. However, she says there is a method most executive recruiters use.

Firms sometimes use a rating system that analyzes, among other things, the candidate’s entrepreneurial energy and experience in turnaround circumstances. One private equity executive recruiter said that the key is focusing long-term on a good adaptable candidate, as the industry is very fast-paced and subject to major changes. Most recruiters agree that hiring a seasoned veteran who brings leadership credentials is critical for firms, especially in today’s shaky market. As the private equity industry expands into emerging markets having a strong executive will likely prove to be the edge on the new firms.

Private Equity 2008

Private Equity Hiring Trends for Spring 2008

Tags: private equity jobs, private equity 2008, private equity career, private equity 2008 report, private equity careers, private equity job data

Private Equity Recruitment

Finding a Private Equity Job Working with recruiters

From Private Equity Jobs.com, article source

Tags: Private Equity Jobs, Private equity job, private equity career, private equity jobs recruiting, private equity recruiters, private equity recruitment, private equity fund jobs

If you’re looking for a job in private equity, here is a great tool.

Private Equity Jobs Database tracks hundreds of private equity jobs and is routinely updated and monitored. In addition, it lists profiles of major private equity recruiters and has a number of resource links. Basic access is free and upgrading to premium is $60 for three months (with a 100% money back guarantee).