A private equity MD's guide to getting a junior job in the industry
Getting a job in private equity – or the buy-side in general – is much, much tougher than getting a job at an investment bank (known as the sell-side). Investment banks Goldman Sachs and JPMorgan have acceptance rates for prospective interns of 0.8% and 0.9%, respectively – but private equity firm Blackstone has an acceptance rate of 0.25%. If you want to beat those odds, this is what you need to know.
Get Morning Coffee ☕ in your inbox. Sign up here.
Speaking at the LSE Alternative Investments Conference this week, Giovanni Orsi led a panel of his colleagues from PSP Investments, one of the biggest pension funds in the world. Orsi himself is a managing director at the fund, and head of its private equity relationships and partnerships team.
Orsi was joined by Emily Lawrence and Grace Li, senior managers in PSP’s infrastructure and private equity teams, respectively. He was also joined by an associate and analyst at the firm. Orsi’s panel discussed the paths to take – and pitfalls to avoid – in pursuing a career both in private equity specifically and on the buy-side as a whole.
How to get into private equity if you don’t study finance
“Diversity of education is extremely important,” said Orsi. “It allows you a different knowledge segment and skillset.” In the private equity process, “you want a difference of opinion and different views.” Lawrence concurred and noted that the numbers that finance professionals crunch actually do represent real, existing things.
Lawrence also mentioned fellow PSP infrastructure manager Marialina Klokidi. Earlier at the conference, Klokidi, a former geotechnical engineer, praised her engineering background, saying that it – and other professions – can be directly implied to the private equity process.
“Maybe I bring more understanding of how a good form is constructed. You get people in this business that can give you a view on how supply chains or operations work,” Klokidi said. “It's always good to have multiple perspectives.”
What to do right if you want a private equity job
Whatever your background, there are some traits that you need to have regardless if you're going to get into private equity. “I put honesty up there with loyalty,” said Orsi. You also need to be able to think on your feet: if you don’t know how to answer a particular question, admit it, and then take your time to answer it within the context that you know, such as concepts you might have learned on your university course. “Have a sip of water and breathe,” Orsi said.
Even if you study something finance-aligned, it may not matter. Luckily, financial services firms aren’t expecting you to have prior knowledge. “Economics is not that relevant,” said Lawrence. “It doesn’t teach you the accounting and finance directly.” Just keeping up to date on macroeconomic news is more relevant to anything that an economics degree can teach you.
When you're assessing an investment, research is always key and not always what you think. “When you're looking at companies, it's quite useful to have a look at to see how long people have been there,” the analyst said. “Expecting 10 years of the people on your team… It's a long time.” It’s therefore a pretty good sign if people spend so long at one place in their career.
At the end of the day, it’s about showing intent. “Just get your foot in the door,” said Li, who praised the students at the conference for taking their first steps into finance. “Make sure you join a society at university. You don't all have to be the treasurer of the banking and finance society. At university, I was in the Frisbee society. I wasn't very good, but it just meant that I could show the skills of teamwork, leadership and resilience.”
Mistakes to avoid if you want a private equity job
Generally speaking, not doing everything detailed in the previous section.
More specific pet peeves for PSP team include boring people. “My pet peeve would be when people try and get their foot in the door by sending a generic email to every person in the team,” said Li. “They figure out the email address and they send it to everybody. They talk to each other. Those are usually the first off of my CV file when I discard.”
A lack of due diligence can also be a dealbreaker. “It’s really obvious, but get the right name of the company,” said Li, referencing when a colleague received an email referencing the wrong Canadian pension fund.
It’s more than just about rudeness, however – it’s also a sign of poor preparation. “My pet peeve is when the candidate is very obviously distracted with something else,” said Lawrence. “They might Google to get an answer to the question that I asked, and it's clearly on the screen. It's better to come off natural and just be upfront rather than try to sneak by.”
Preparing and perfecting your private equity interview
“Definitely just reading a lot,” said the analyst on interview prep. “Reading a lot about the company before you go to the to the interview for sure. Look at their portfolio,” he added, and “what sectors they invest in, Which regions they're invested in. If there's any experience that you've had which can add value into that portfolio.”
The other thing is to brush up on your technical knowledge. “You can’t really get past that.” You have to be able to “nail the technicals, and you have to know the fundamentals of investing.”
You also have to be curious about the firm you’re applying for. “Bring some questions that you know you find interesting, that might engage the conversation a little bit more,” the analyst said. “At the end of an interview, there’s always a Q&A,” elaborated the associate. “People ask very intelligent questions. I’ll flip it around – what is the answer to your own question? What do you think my answer will be?”
All in all, it’s about being prepared as a general expert and person of interest. Don’t just memorize investment banking questions, but “actually understand concepts. Be able to walk through your thinking process in a step-by-step and logical way.”
Converting your private equity internship into a job offer
There are two things you need to do to convert an internship into a job offer. “The first is to make sure you work with everyone in a team,” said Li. “Everyone on the team is going to give feedback to you.” That means more than just “coffee chats and informal conversations,” however.
“The other piece of advice is attention to detail,” Li said. “Once you’ve got the internship, we know you’re an intelligent person, you’re hardworking, and you have some work ethic. It’s your attention to detail that could sometimes be the cause of failure.”
That doesn’t mean that mistakes can never, ever happen – or that they’re the end of the world when they do. “If it’s just silly mistakes, you’ll make them,” Li said. “That’s okay, but check your work.” It’s all important to remember your role: “It’s a six month program,” Li said. “You want to be acting like an analyst. You are an analyst until the end of the internship.”
The analyst concurred. “They’re looking for you to already be within the role.” They don’t want to see you as an intern with qualities close to that of an analyst. “You just won’t be converted.”
Finally, add value. “For example, you might be really well versed in politics – you're up to date with political situation across Europe – and you can add value within the team” by explaining how a new event can impact the portfolio, for example, suggested the analyst.
Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, WhatsApp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)
