Please forward this private investment pools for friends and family screen to 174. Invariably, this question will be asked during any private equity interview, and is one of the most critical. What are the private equity firms looking for when they ask “why PE, why our firm”?
Obviously, the interviewer will want to know your motivations behind doing this job, and also behind joining their firm. However, the question is actually much more complex than you might think. Private equity firms already know why people apply to their firms: prestige, better long-term money, fewer hours, and the entrepreneurial aspect. What’s driving you professionally and personally? Have you done some research about the firm?
What special skills do you have, and how can they be of use to the firm? Are you going to stay long-term? Make sure that you address the four points described above, directly or indirectly. Why PE”, I would still answer the “Why our firm” at the same time. For this question, there needs to be a solid personal motivation as well as a professional motivation. Personal motivations: Those usually revolve around an “entrepreneurial spirit” and desire to do investments and act as a principal. Professional motivations: This usually revolves around the aspects of your work that are similar or related to private equity.
You just need to show that you know the work that PE involves. Points not to mention: money, prestige, fewer hours, or plainly saying “I like to do investments”. PE, so if you mention it talk about a long-term “hold” strategy. This is the hardest part – you need to tie the firm’s strategy to your skills.
Language skills that tie in with the fund regional expansion strategy. Sector experience that ties in with sector focus. Basically, this would be something saying that you believe that the PE firm is well positioned, and that is why you want to join them. If you got recommended, do mention this fact. Private Equity Interview Preparation Below is some good advice from specialist recruiting firm KEA Consultants about the Private Equity Recruiting Process. The private equity interview process is challenging from start to finish.
Most firms will interview a candidate over three to four rounds, but there are cases where it can be as many as ten rounds. It all depends on the firm, the number of people they want you to meet and the testing involved. However, all candidates should be prepared for general CV overview interviews, as well as the case study and LBO modeling round. The majority of mid-market and large cap buyout funds will test candidates on their modeling skills. Smaller cap or growth equity funds are less likely to test these skills, but may have a business case study where you present on a private investment.
All firms will want to test your commerciality and business sense. The key to doing well in any interview is preparation. Do your homework on the firm, the professionals and the portfolio. At a minimum you should know the fund’s size, how long they have been around, the stage at which they invest, which sectors they invest in and their investor base. There are some extremely practical things you can do throughout the interview process to guarantee that you present yourself to best effect.
During the CV interview rounds there are certain points and questions that you should specifically prepare for. We have listed examples below for you to think about. Know your CV: you must be able to answer questions on anything on your CV. If you’ve listed several transactions then make sure you really know what happened and know the relevant numbers: IRR, debt equity ratio, price, earnings multiple etc. Practice walking through your CV from university onwards in a structured 2-3 minute overview. Tell me about a deal on your CV: If you are from investment banking you should definitely expect this question.
Why do you want a career in Private Equity? Tailor your answer to your experience, skills and relevant interests, as demonstrated on your CV. Why are you interested in our firm? If you’ve done your homework on the firm, then you should be able to easily answer this question. From the companies you’ve worked with, which would make a good private equity investment and why?