Private Equity Job Interview

Private equity is a lucrative industry to make a career in. Not only you get paid handsomely and enjoy a lavish lifestyle, but you also get entitled to some extraordinary perks and work benefits. PE is considered the most difficult domain of financial services to break into. And that is why less than 1% of those apply for the job gets shortlisted for the role.

The current average base pay of a PE associate in the US is $111,000 per year. Add the big bonuses, incentives, and other variables that professionals earn in this specific domain of finance, and you will get a highly impressive number. The big remunerations associated with the discussed work domain is what drives thousands and millions of finance graduates each year to seek a career in private equity.

What Kind of Questions Get Asked in a PE Interview?

Expect questions on the following aspects of the industry:

a). LBO Modeling

b). Fit Questions

c). Technical Questions

d). Deal Experience

e). Case Study

d). Behavioral Questions

One can prepare well for potential questions to be asked on the above-mentioned topics. Landing a private equity job requires you to put in hours of work preparing in advance for the questions related to the basics of the functioning of the industry, and the attached concepts.

Preparation for Fit Questions in a PE Interview 

The questions one can expect to be asked in a PE job interview that falls under the category of “fit questions”:

a). Walk me through your resume.

b). Why private equity?

c). Tell me about yourself.

d). What are your strengths and weaknesses?

e). What makes you a good teammate?

Answering the “Fit Questions”

Two ways exist to answer such questions flawlessly. First, be confident about your own story, and put it as it is. When an interviewer asks you about yourself, he is judging you and seeking the cultural and professional suitability of you in the organization.

Such questions weigh significantly more than you could ever imagine. Make the most of your understanding of the question, and reply in a manner that provides you with an optimal chance of acceptance at the firm you are interviewing at.

Second, be ready with some backup stories in your mind to provide as a solid proof of what you say in the interview. Such stories must project you as a good team worker, a go-getter, and a problem-solver. Also, do make sure that the stories told, somewhere fall in line with the resume presented.

PE Interview Aspect Focused on Industry Case Studies

Most of the private equity firms in their job interview process, ask candidates questions based on old case studies. You may have to walk the interviewers through an old case study whose CIM (Confidential Information Memorandum) will get provided to you during the interview.

Here is what a typical PE Case Interview Looks Like:

a). You were given a copy of CIM (Confidential Information Memorandum), usually referring to a mature old sell-side process.

b). One is supposed to create a memo basis the CIM provided consisting of a couple of pages that form a summary or gist of the presented CIM. You analyze the pros/cons of the same in detail, and prepare a SWOT analysis.

c). What interviewers test in this part of the interview is how efficient and prepared you are to identify whether the target firm is an apt candidate for an LBO (Leveraged Buyout) or not.

Questions on Deal Experiences in a PE Interview

A third of the questions in a PE interview is focused on financial deal-making. Especially, LBOs. You must be able to walk your interviewers through the deal experiences you have mentioned on your resume. Interviewers will probably discuss each element of the deal-making in detail. And that’s why your knowledge of the same must be thorough. Read and understand each and every facet of the deal you have mentioned in the resume. Give yourself an opportunity to read and research on the articles/coverage reports that were published about the deal.

I hope the article will help you sail through the testing process of a PE job interview.

Best wishes!