How to land a job in private equity

by Caroline Wilson
Vice President at Charles Aris Inc.

As a member of the Strategy & Business Development recruiting practice at Charles Aris, I spend my time working with management consultants from firms such as Bain, McKinsey and BCG. One of the areas in which we place these candidates is the private equity industry. I’ve found that people coming from the world of management consulting are often surprised when they learn that consultants get hired by private equity firms and their portfolio companies, but there are many P.E. firms which love to hire management consultants.

Below are some of my thoughts on best practices for making a move into the private equity industry as well as what top firms are looking for in the highly competitive interview process:

(1) Find a consultant-friendly firm: The value of focusing on firms with a history of hiring management consultants is huge. You have a much higher likelihood of receiving an offer from one of these firms versus interviewing at a firm that traditionally only hires investment bankers. You may even notice a smoother transition in terms of training and on-boarding as well.

How to identify these firms? The best sources beyond firms’ individual websites tend to be word of mouth, the alumni database of your consulting firm, and Linkedin.

(2) Top performance: It’s true – landing a job in private equity is extremely competitive. As a result, your performance in past jobs is critical. To garner attention at most top firms, you will need to be a top performer at your firm, complete with references and possibly performance reviews to back that up.

(3) Diverse mix of project work: What every firm is looking for may vary slightly, but it’s best to have a nice mix of growth strategy and operationally focused project work in consulting. Exposure to the private equity industry – specifically due diligence projects – can be highly helpful. There’s often a misconception, however, that private equity firms prefer the candidates with the most exposure to private equity during consulting. In actuality, firms care more about your ability to break down business problems and make smart judgments about investment opportunities (see thought No. 4) than the fact you’ve worked on a dozen DDs for private equity clients.

(4) Cracking the case: Once you get your foot in the door, performance on case interviews is likely the biggest driver of success in the interview process. Perfect SAT scores, stellar references and a great résumé alone won’t get you an offer. Most cases will involve answering the question “should we invest in this company?” So spend time practicing how you would approach that problem. Ideally, practice with someone else familiar with the private equity recruiting process who can provide feedback.

(5) Demonstrating excellent cultural fit: Culture varies from firm to firm, of course, but I consistently hear that firms are looking for humble candidates who have good energy and a genuine enthusiasm for the role they’re pursuing. Trying too hard in interviews can result in being perceived as arrogant, nervous or stiff – all of which may raise questions about what you would be like to work with on a daily basis.

(6) Be memorable: Private equity firms tend to interview lots of candidates with impressive résumés. Eventually, all those candidates can start to run together. Look for examples to share personal experiences or unique stories. Bonus points if the story demonstrates work ethic or an entrepreneurial spirit. Some of my favorite stories (which ultimately led to offers!) have included selling Beanie Babies on eBay as a high schooler (hey, it was the Nineties!) and starting a dorm cleaning business which scaled to more than a dozen people.

(7) What matters less than you might think?

  • Industry experience: This is somewhat dependent on the private equity firm, but most clients we work with don’t place a great deal of emphasis on the specific industries a person has been exposed to as a consultant. They tend to look more for the general athlete, so exposure across industries is ideal. Demonstrating an enthusiasm for the firm’s work is often more important. (The occasional exception to this rule? Niche firms specializing in certain industries, like tech, tend to place more emphasis on industry exposure.)
  • Valuation experience: This also varies from firm to firm but, as a rule of thumb, if you are interviewing at a consultant-friendly firm (see thought No. 1), experience with valuation modeling isn’t a requirement and usually isn’t even part of the interview process. What’s most important is a candidate’s ability to demonstrate a strong understanding of business fundamentals and knowledge of financial topics such as balance sheets and income statements.

So there you have it. I hope you find this list of best practices helpful as you pursue your career in private equity!