How do you break into private equity with a non-traditional background (for example, no experience with investment banking)? Here are the three things I tell people to focus on (short video:TikTok|YouTube).
FIRST: Don't tell people you will "do whatever it takes" to get the job.All they want to hear is that they will have to train you to do everything. This is probably the most common mistake I hear people make. They assume this shows a strong desire to work hard, but the reality is that for any position that offers superior compensation, the hiring decision will favor the candidate who can add the most value. So learn to communicate how to add value from day one.
Some additional comments from private equity professionals:
Convey a strong work ethic, but don't appear desperate.Private equity is a tough sector. If you've experienced investment banking, you know what it feels like to work in a demanding environment. Not having this is not only unknown, but may also indicate that you are unwilling or unwilling to take on the required workload. Be prepared to offer anecdotes that describe how you went to great lengths to achieve success. Again, this doesn't mean you will do "whatever it takes" to secure the job; it communicates an eagerness to move forward, with real experiences to back this up.
Communicate your skills effectively.Your goal is to win someone over and give him or her the opportunity to vouch for you once the hiring decision has been made. They advocate for you about candidates with traditional backgrounds. So your story must be convincing. Think of 2 or 3 skills that match the daily responsibilities of a private equity analyst / associate / VP / etc.
For example, if you've worked with large, complex data sets, you're probably excellent at Excel and data organization. Or perhaps you have sector-specific knowledge (for example, you've worked in the energy or healthcare sectors) that is valuable to the company's investment thesis. Or perhaps you excel at developing relationships with executive teams (i.e. the C-suite). Whatever it is, learn to communicate that you can probably do it better, faster, or more creatively than someone from a traditional background, given your unique experience. As always, anecdotes help!
OTHER: Network aggressively.It sounds simple, but your biggest advantage is that most people won't do this. It's too hard or too uncomfortable, and eventually people give up. That is your advantage.
So what's the best way to network? A friend of mine taught a class on securing a senior private equity role at Columbia Business School, and it was mostly about networking. I interviewed him about this subject and posted the videoASM's YouTube channel. The video has a traditional background, but the logic still applies. Look down:
If you repeat the video, you will often hear 'no'. So? There are so many different private equity shops these days. If you get rejected by one (or 100... :), learn from the experience and keep networking. You are looking for a cultural match and a company that happens to need your skills. Take every interview you get as practice and stick with it.
When selecting companies to contact, it may be helpful to know that the process becomes significantly more competitive as you scale. The bigger the company, the fiercer your competition. Without relevant experience, it will be extremely difficult to get a job at a dent company.
Note from contributing author Mary Reed (formerly Harvard, McKinsey & Company, American Securities): Breaking into a private equity mega-fund is absolutely possible. I know many people who were not investment bankers and now work at KKR, Blackstone, etc. The trick is that it's kind of a U-shaped curve, because your chances of making that transition are much higher, very early or very late in the process. your career and basically zero in the middle (i.e. they hire people outside of consulting, sometimes industry, etc., and they will hire super-senior partners who are lawyers or other specialists, but everything in between basically doesn't exist ) .
Quick thoughts to increase your chances of success:
- Identify companies that will value your skills and background.
- Focus on companies that have a history of hiring non-traditional employees (reviewing team bios will help identify these).
- Be flexible on job parameters, including geography, job title and company size. You're looking for yoursFirstjob in private equity, not your last (definitely don't say that in the interview...).
- If your searches lead you to people from non-traditional backgrounds working in private equity, contact them to learn more about their process.
People new to the industry often consider “getting into private equity” to be the same, regardless of which company you work for. This couldn't be further from the truth. Think about it this way: If you wanted to work in the restaurant industry, do you think the process would be similar to a chain restaurant like McDonald's and a Michelin restaurant? That may be a bit extreme, but the point is that PE firms can be very different. Ifprivate equity is becoming increasingly special, as well as the skills and backgrounds needed to work on each. Search until you find your match.
THIRD: Train and invest in yourselfForyou get the job.Private equity firms want to know that you can add value when you show up for work. So much so that some new hires will offer numerous training resources before they start. To be clear, these funds are given to people who have already secured the job.
So learn the skills needed to get the job and make sure you can discuss the process of buying a business. Fortunately, the information needed to learn about private equity is now available from several sources, including ASM. In fact, many people who reach this subject have enrolled in multiple programs in an attempt to compensate for the lack of relevant work experience. Consider taking more modeling courses because your competitors have been building models for years.
Taking courses while applying for jobs can demonstrate a level of dedication and drive that can set you apart from the competition. During inductions and interviews, make sure you communicate the steps you are taking to prepare for the role. Let people know that you are fully committed to private equity and that you are proactive in your approach.
As it relates to the process of buying a business, you can learn thisPrivate equity education curriculumavailable from ASM for just $25/month. I wrote it with my friends, who are all industry professionals, and I think it is the best source of information on this topic.
I repeat: the basic skills are the absolute prerequisite for getting the job. If you're having a hard time committing to the content, remember that your competitors have learned this on the job. You're trying to replace your investment banking experience with aggressive networking and self-taught courses. In other words, if you're wondering how consistently you should take this course, remind yourself that your competition spent years in a cubicle until late at night trying to get the same job.
Since I've been running ASM, I've seen a lot of people do this. It is a challenge. But it can be done. Good luck.
Read more about private equity transactions with ASMsPrivate equity-opleidingRoute. The Private Equity training on ASimpleModel.com was developed by industry professionals. The content below goes beyond the LBO model and explains how private equity professionals purchase, structure and close deals.
