If you're working as a junior in a large investment bank right now, you're probably thinking of a move to the buy-side. I have just moved into a role at a tech-focused VC fund and let me tell you something - small players are the place to be.
Analysts in large investment banks need to start playing the game from the moment they arrive on the graduate programme - and most do. Any bank HR guru who tells you that banks' junior retention efforts are working is lying - they know that a large proportion of the analysts who do stick around are simply the ones that failed to make the cut in private equity.
The good news for banks is that this year, most of their juniors are ignoring the big private equity funds. The likes of KKR, Blackstone and CVC Partners are now hiring graduates directly anyway and are not THAT different from investment banks. We're all applying to the small VC and PE firms instead
I left my job at a large European bank in the City after just one year. That year wasn't the limit of my banking experience though - I'd also completed long-term internships in leveraged finance, project finance, M&A and equity capital markets. I have a Masters in finance degree from a top European university (I got top grades); my bachelors is in business administration. I've been involved in community projects for large investment banks, I speak three languages and I am FUN.
Why do I mention this? Basically, if you're applying to a small private equity company your CV is the first line of defence. If you don't have all the facets I've listed above, you're not going to get a look in. If you do, you're invited to interview and it's pretty much down to how well you'll fit in. In a large private equity firm, the investment team is about 25 people, if you're lucky. In a small player, it might be less than half that. You are the junior. You're going to spend a lot of time with these people, both in the office and on business trips, if they don't feel they can get on with you, there's no chance.
Small companies focus on cultural fit, so you need to tailor your application. I've heard of people applying for hundreds of buy-side jobs before getting in. I applied to 10, and managed to secure an interview with all of them The competition is tough in private equity, but if you're targeted this becomes less of an issue. If you research the industry you'll uncover small players who have a good reputation and once you've uncovered them you need to take the time to study the company.
My private equity interview was a three round process over the course of about a month. The first two were interviews with the team; I was probed on whether I'd fit in. This wasn't just, 'What do you know about the company?' or 'Why do you want to work for us?'. There were a lot of questions about my career ambitions, which were more difficult to rehearse and probably had a bigger impact on their decision to hire me. - They wanted to know that I'd stick around.
My advice to investment banking analysts looking to make the switch is not to rush into anything. So many people set their sights on a PE job that they don't really consider whether the company is right for them. Know what your expectations are, research the company to see if it can meet them and if an offer is on the table make sure it's something you want.
James van der Var (a pseudonym) is an investment analyst at a small VC firm in London