How do you ace private equity interviews?
Research the firm
Show your personality: Headhunters meet with dozens of investment bankers every day, so you need to be able to stand out with your own unique personality. Beyond the actual interview, create small talk with all of the people you meet at the headhunting firm and be able to talk about more than just finance.
Private equity interviews can be challenging, but for most candidates, winning interviews is much tougher than succeeding in those interviews. You do not need to be a math genius or a gifted speaker; you just need to understand the recruiting process and basic arithmetic.
The main types of PE interview questions you will encounter include technical knowledge, transaction experience, firm knowledge, and culture fit. In addition, you may also be asked to complete a practical financial modeling-related case study.
Interviewers are looking for candidates who have a genuine passion for private equity and can bring unique perspectives to the company. They want to see that you've done your research, that you possess the necessary skills and experience, and that the career path aligns with your goals.
Landing a career in private equity is very difficult because there are few jobs on the market in this profession and so it can be very competitive. Coming into private equity with no experience is impossible, so finding an internship or having previous experience in a related field is highly recommended.
but nowhere near as much as in management consulting. While the travel will be less, the work in private equity is very stressful and demanding, so the hours you actually spend working may be more stressful or mentally demanding.
| State | Annual Salary | Monthly Pay |
|---|---|---|
| California | $89,038 | $7,419 |
| Maryland | $88,832 | $7,402 |
| Tennessee | $88,240 | $7,353 |
| Utah | $87,969 | $7,330 |
For a student looking to break into one of the top 10 PE firms, your chance is 1 in 300 or 0.33%. To break into one of the top 10 hedge fund firms, your chance is 1 in 147 or 0.68%.
With this power, however, comes greater accountability, as they're more deeply involved as company shareholders. This can lead to greater stress in private equity than in consulting firms.
What are the five P's of the interview process?
- Preparation. Researching and preparing the following before your interview will show that you're interested in both the role and the firm (with the added bonus of showing how well organised you are!);
- Practice. Practice makes perfect! ...
- Punctuality. ...
- Presentation. ...
- Performance.
- Prepare.
- Practise.
- Present.
- Participate.
- Make sure you prepare for tackling the “Why” questions. ...
- Practice financial modeling and technical concepts. ...
- Practice and rehearse the most commonly asked interview questions. ...
- Study the bank that you are interviewing for. ...
- Research the culture of the bank. ...
- Be cool (and normal).
- Highlight that you have some transaction experience.
- Express an interest in a sector that the PE firm invests in.
- Position yourself as a long-term thinker or investor.
- Show that you know what the PE firm has invested in.
PE firms do not simply sit back and observe the management of companies they invest in. Rather, they actively participate in management and work to implement enhanced strategies that add value, drive growth and improve financial performance.
As private equity investments require millions of dollars, they are usually not available to the average investor. Investment banks compete with some private equity PE firms, also known as private equity funds, to buy good companies and finance nascent ones.
Getting a job in private equity typically requires a strong educational background in finance or a related field, relevant experience in areas like investment banking, and proficiency in financial modeling and investment analysis.
For the vast majority of first-year private equity associates, the base salary is around $135k to $155k. Then, based on fund performance, bonuses tend to range from 100% to 150% of the base salary.
Age Range: You need several years of IB or a closely related field to get in, so we'll say 24-28. Private Equity Associate Salary + Bonus: Your salary + bonus will probably be in the $150K to $300K range, depending on the size of the firm and your performance.
Private Equity Career Training
PE firms are small, tight-knit, and full of extremely smart and highly motivated people.
What are top salaries in private equity?
In short, if you're at a top mega fund, then you can expect to get paid between $350-$400k per year. These numbers reflect total compensation paid to private equity associates in 2022.
Private Equity Associate Lifestyle and Hours
At many smaller funds and middle-market funds, you can expect to work 60-70 hours per week, mostly on weekdays, with occasional weekend work when deals heat up.
| Annual Salary | Weekly Pay | |
|---|---|---|
| Top Earners | $241,298 | $4,640 |
| 75th Percentile | $187,500 | $3,605 |
| Average | $143,004 | $2,750 |
| 25th Percentile | $113,500 | $2,182 |
Private Equity Associate Salary. $69,000 is the 25th percentile. Salaries below this are outliers. $120,000 is the 75th percentile.
Principals are the next most senior role and usually need to have several years of experience as a VP before making the leap. Principals are evaluated on their ability to find promising companies and close deals on them.
