Private Equity interviews are incredibly competitive and challenging. The competition is so aggressive that for a single entry-level job, we may find 300 plus applications. Eventually, the interview process is notoriously difficult.
Still, the demand for the job is high because the compensation is high. The median salary of a Private Equity Associate is $91,728. The lucrative opportunities have inspired the finance students to pursue a private equity career.
This article unlocks the critical knowledge required for facing the interview. It highlights the strategy, technique, and mindset needed to attend the distinctive Private Equity or Venture Capital job interview.
Preparation to attend the PE interview
The recruiting process is intense. Hard work and dedication are crucial inpursuing a private equity career. A few of the tips mentioned below may help you to succeed in the interview.
- Know about the PE firm you want to join
For instance: large or middle-market fund, investment style, culture, geographical location
- Know your resume inside and out
- Know your preference to work
For instance: Generalist or industry-focused profile
- Schedule screening interviews as early as possible
- Prepare extensively by discussing and practicing with others
- Get prepared for analytical questions and brainteasers
- Hold one of the best private equity certifications to stay ahead in the competition
For instance: Certified PE Professional (CPEP) from GTC Institute, Chartered PE Professional (CPEPTM) from USPEC, EVCA certification in Institutional PE Investing, and so forth.
Private Equity Interview Process
Almost all PE interviews have multiple rounds of interviews. It could be an on-cycle, off-cycle, or a combination of both the processes. Be prepared for a lengthy process that may last for three to several months. The rounds are:
First Round of PE Interview
The PE firms host a 30-minute psychometric test to ensure that you have the right calibre, strong communication skills, perfect thought process, ethical, and genuine reasons to pursue a PE career.
You should be prepared to answer firm-specific questions. You must study publicly available information regarding the firm. It is generally available on the website.
You may be given a small case study to judge business sense. They gauge your understanding of business operations, drivers for ROI, SWOT analysis capability, rationale analysis, and opinions.
Second Round of PE Interview
The firms look for candidates who have strong financial and accounting and modelling skills, the ability for quantitative analysis, and data-driven decision making.
Practice well to create simple LBO models in less than one hour, starting from scratch. You may be handed with a sheet of paper having lots of assumptions or asked to build out an investment scenario.
Final Round of PE Interview
The likability Test:
Many firms try to drill down on your perceived weaknesses or ask a lot of very personal questions. The main intention is to know how likable you are as a person, understand your personality and career goals.
The key to success is preparation. Do your homework on the firm, profession, and the portfolio. The rest is assured.