by Brian DeChesare Comments (153)

Why Private Equity?

Why Private Equity?
Man in white and question marks above head..

So you’ve made it through your first 6 months in banking alive. Your waist is bigger from all those tiramisu desserts, but luckily your bank account has gotten even fatter than your stomach.

And your bank account is set to get even fatter in the future – if you can successfully break into private equity.

While you know about the case studies and modeling tests you’ll get and the deals you’ll have to discuss, you haven’t put any thought into the “Why private equity?” question.

Which is a problem – because the last thing PE guys want is a banker or consultant who wants to do PE simply because he/she hates banking or consulting or because everyone else doing it.

Why Does This Matter?

While PE firms want people who are technically proficient (one reason why consultants face a more difficult time getting in, at least in the US), fit is even more important than in banking because firms are an order of magnitude smaller.

Whereas the top banks have tens of thousands to hundreds of thousands of employees, the biggest PE firms in the world only have a few hundred – and there are thousands of PE firms with fewer than 10.

Unlike banks, private equity firms have no need to hire an army of analysts to do grunt work: they’re not creating pitch books and competing for sell-side, buy-side, and financing mandates all day, and if they’re understaffed they can say “no” to potential investments.

The interview process can also be much more of an extended affair in PE, with many firms below the mega-fund level conducting interviews over months rather than the days or weeks you see in banking (the mega-funds do it much more quickly).

As a result, fit is critical and if the Partners doubt your motivations for wanting to do PE, they won’t give you an offer.

What NOT to Say

As with some other interview questions, there’s a temptation to say something stupid in response to “Why private equity?”:

  • “I don’t like the hours in banking, and I want a better lifestyle.”
  • “You can make much more money in PE because you’re an investor rather than an advisor!”
  • “Well… all my friends are doing it!”
  • “I want to control companies rather than taking orders from my MD all day.”

I doubt you would say anything this bad in a real interview, but your actual answer may not be significantly better, either.

All the reasons above are bad answers, for different reasons:

  • While the lifestyle may be a bit better at smaller firms, it’s still far from a 9-5 job. And at mega-funds it’s banking all over again.
  • The pay is also not that much better, especially when you first start. Yes, Steve Schwarzman makes more than any MD in banking but he’s also the Co-Founder of the best-known and oldest PE firm in the world, with 30+ years of experience.
  • If you want to become an investor, you want to demonstrate independent thought as opposed to following what all your friends are doing.
  • You don’t “control” companies as an analyst or associate, you manipulate spreadsheets.

In short, any variant of “I don’t like my current job and PE would be better because [Insert Reason Here]” is bad because it’s too negative.

And anything where you sound like you expect to conquer the world and become a trillionaire also sounds bad because it shows that you don’t have a clue about how the industry works.

PE: The Promised Land? Fact and Fiction…

You might have had dreams of becoming a baller at KKR or Blackstone making $100 million per year, but you should pinch yourself and wake up since that will never happen.

I often group IB and PE together on this site because the work is not much different.

If you don’t like Excel, if you think EBITDA is boring, or if you have no interest in analyzing financial statements or reading about different companies, you should stop right now and do something more creative like advertising instead (I hear Don Draper is hiring…).

There are advantages and your role differs from what you do in banking, but if you fundamentally do not like analyzing and valuing companies, you’re going to hate it.

You do get more responsibility at certain firms, sometimes you’ll get to observe Boards of Directors and sit in on meetings, and you don’t get the stupid fix-the-printer-and-fetch-coffee tasks that you see in banking.

But please do not assume that it’s a night-and-day difference just because a bunch of 22-year old students in your finance club say it is.

Better Answers to “Why PE?”

To answer this question successfully, you need to avoid the clichés above and point out positive differences between PE and banking or between PE and whatever you’re moving in from (consulting, corporate development, etc.).

But you need to do that by highlighting what you’re looking for rather than what you don’t like about your current job.

Examples of solid reasons:

  • You want to work with companies over the long-term instead of just on a single deal.
  • You want to get exposed to the operations of companies and understand all aspects rather than just the financial ones (note: “exposed to,” not “control” or “improve”).
  • You want to contribute to companies’ growth by looking at add-on acquisitions and other expansion opportunities that only an investor would be able to execute.
  • You see yourself as an investor in the long-term, and want to learn all aspects of the process and how to evaluate whether a company can deliver solid returns.

It’s not “wrong” to make a direct comparison between PE and other fields (see the first 2 reasons) but you always want to downplay the negative part.

Ideally, you’ll tie the investments a PE firm makes to what you’ve done previously in school or work:

  • The engineer-turned-banker has a much better story to tell if he recruits for a tech PE firm or growth equity firm and explains how he’s interested in applying his knowledge of IT and finance to investing in IT companies.
  • If you’ve worked in Restructuring or Distressed M&A, you have a much better story if you recruit for a firm that specializes in turnarounds or distressed investments.
  • If you’ve done consulting for restaurants or food chains, you’ll have a much better story to tell when you recruit for a PE firm that specializes in those types of investments, or even in the consumer sector as a whole.
  • If you’ve done corporate development at a media or broadcasting company, you’ll have a much better story to tell when you interview with Bono at Elevation Partners.

The exact reasons depend on your background and where you’ve worked before, but you should combine these points – industry / company / deal focus + investing and working with companies in the long-term – to frame your answer:

  • The banker would talk about how he wants to work with companies over the long-term and learn how to assess whether they can deliver solid returns so that he can become an investor in the future.
  • The consultant would talk about how he wants to learn both the financial and the operational aspects of companies, and how he wants to be involved with decisions that a company implements rather than just recommendations.
  • The corporate development guy/girl would talk about how he/she wants the opportunity to work with all different types of companies in the market rather than just one.

It’s not rocket science: highlight the positive differences between PE and your current field and why you’re interested in pursuing them as you transition into becoming an investor yourself.

If you’re coming from a banking or consulting background, you may get questions about PE vs. other exit opportunities:

Why PE Over VC?

If the PE firm you’re interviewing with asks you this one, say that VC is too far in the operational direction for you, and how you feel it’s more about predicting the next Google/Facebook/Zynga than analytical reasoning.

You prefer PE because it’s a blend of both operations and finance and because you can help Founders with well-established businesses make them even better via solid analysis and research rather than just guesswork.

And, of course, if you’re interviewing for VC you want to take the opposite position and say that PE is all about financial engineering with little value-add and that you can truly help early-stage companies take off because they’re more in need of help than established ones.

Why PE Over Hedge Funds?

This one is harder to answer because there are so many types of hedge funds and the strategies used and the fund sizes can make for completely different experiences.

But the main difference between most hedge funds and most PE firms is that in PE you invest in entire companies (at least, in developed markets) whereas at hedge funds you make much smaller investments and it’s often closer to trading.

You prefer PE because you want to understand how entire businesses work – at a hedge fund you would only get the financial aspect and your skill set would be more limited.

Why PE Over Corporate Development?

This one also has a more subtle distinction: the main difference is that in PE you look at all sorts of different investment opportunities and companies, whereas in corporate development the scope is more limited and you’re always looking at deals and partnerships for your own company.

So that’s exactly what you say in your answer: you want to gain a broader horizon and work in industries and sub-industries outside your own.

You’re more likely to get this type of question if you’re already in a corporate development role and you’re moving into PE – as a banker or consultant it’s not terribly likely unless you say you’re also interviewing for corporate development jobs (um, don’t do that).

Is Any of This True?

I mentioned above that many of the myths about PE (becoming a baller making $100M USD at age 25, buying countries, and surpassing deities) are untrue.

For all these “Why PE” examples I’ve been referencing the mix of operational and financial work and working with companies over the long-haul – so you might rightfully wonder if any of that is true.

It’s somewhere in between: some firms do focus more on add-on acquisitions and operational improvements, whereas others really are just about financial engineering and using as much debt as possible to boost returns.

Even if the firm you’re interviewing with is more focused on finance, though, you will still learn more about operations because you do a ton of due diligence before you actually invest (in banking you mostly just send these documents to other parties).

Unless you start or work at a real company, you’ll never learn the ins and outs of how it “really” works, but you will at least learn more than you would as a banker – so it’s more true than the bad “Why PE?” answers in the beginning.

Why PE?

Hopefully not because you have delusions of grandeur and you’re planning out which beach in Thailand you’ll buy with your first $10 million.

Focus on the positive differences, link your reasons to your background and long-term goals (just like with the “Why investment banking?” question), and don’t fall prey to any of the bad answers about pay or lifestyle.

For Further Reading

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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How to Break Into Private Equity Right Out of Undergraduate with No Investment Banking or Private Equity Internships

How to Break Into Private Equity Right Out of Undergraduate with No Investment Banking or Private Equity Internships

NOTE: Before you get your hopes up from this story, realize that it was written in 2010 and describes events that took place in 2009-2010 (a LONG time ago). Today, this same type of move would be almost impossible because you now need a sequence of internships to win a role in investment banking or private equity.

“Last-minute” networking won’t work as well anymore. And “taking a trip to Europe” right before you start looking for a job is a terrible idea that would sink your chances of winning an offer.

You can still learn a few useful networking tactics from this story, but you should NOT assume that you can do the same thing in today’s recruiting environment.

If you’re under the age of 35, please read the message above closely – before you get distracted by your phone.

One common question I get is, “Should I start in private equity rather than doing 2-3 years of banking first? And if so, how exactly do I break into private equity or hedge funds right out of undergraduate?

The first question is actually trickier to answer, and you can read all about the trade-offs right here.

But I have an easy answer for you on the second one: read this interview with a reader who broke into private equity right out of undergraduate, without any prior investment banking or private equity internships.

Background

Q: Why don’t you start by walking us through your background and what you were up against when it came time for full-time recruiting?

A: Sure. I was from a “target school,” so I certainly had an advantage in that banks actually recruited there. However, I was also at a big disadvantage because:

  • My GPA was not spectacular and as a result most banks didn’t even look at me.
  • I had no investment banking or private equity summer internships.
  • My school had no Economics or Finance concentration, so on paper I didn’t look qualified.

I only got 1 summer internship first-round interview, and when it came time for full-time recruiting I applied to over 100 jobs and only got 2 first-round interviews – neither of which led anywhere.

Q: Wow. So what did you do during your junior year summer if you couldn’t find an investment banking internship?

A: I found an internship at a small VC firm, outside the US in another region of the world – I had some family and friends there, so effectively I got it through my own connections.

Q: Ok, that sounds pretty good. I mean, a VC internship is certainly better than nothing… did bankers just not care about it?

A: Pretty much. I couldn’t write “Investment Banking Summer Analyst” on my resume, so bankers didn’t take me seriously – and to make things even worse, it wasn’t even a brand-name firm.

I tried to spin it as best I could, but banks wanted people who had done banking before.

Q: So no internships and then no full-time offers… what was your next move?

A: Studying abroad in Europe for the next semester, of course!

I was out of the country for the next few months on a study-abroad program, after full-time recruiting was over – so I was set to graduate and come back to the US with nothing at all lined up.

Networking: Top-Down, Business Cards and… Business Cards?

Q: Ok, so I’m guessing that you had to do a lot of networking in this situation. Had you done much before you left for the study-abroad program?

A: I had been going to some informational interviews, and I went to a bunch of recruiting events at my school. I knew that I had to be aggressive with getting business cards and following up with people, so I collected around 40 cards and always wrote about the people I met in my cover letters.

But that didn’t work too well, since I only got 2 full-time interviews.

Q: Ok. So you went off to Europe while taking a break from recruiting.

How did you get back into the swing of things, and did you do any networking before you arrived back in the US?

A: I took some time off at the start of the year, and then in the winter I started ramping up my networking efforts once again.

I created an Excel file of anyone even remotely related to investment banking and started emailing them asking for advice. I also continued applying for jobs, but overall it was hard to get anyone on the phone when I was on the other side of the world.

Q: So you have your list of names in Excel, and you’re doing some networking while in Europe… or at least trying to. Where did you get these names from?

A: At first it was just friends and family – I started with those I knew best, and took it from there.

The response rate from friends and family was not spectacular, so when I came back to the US in the summer I started moving toward my alumni networking instead.

A lot of alumni were “nice,” but many of those contacts didn’t go anywhere either, so I continued using both sources throughout the process.

Q: Let’s talk about that transition back to the US. What did you do after you arrived back from your trip to Europe?

A: I woke up every day and just sat on the computer and called people all day long. It was a mix of cold-calling, reaching out via email and going through referrals.

I was constantly going downtown (M&I Note: This was not downtown Manhattan – it was another, smaller financial center) and talking to people in equity research, investment banking, private wealth management, and institutional asset management – I was at the point where I didn’t care what I got in finance, as long as I could find something relevant.

Networking Tactics: Nuts & Bolts

Q: So you used a combination of informational interviews and cold-calls and to spread your net wide when reaching out to your contacts.

Now let’s talk about your tactics – what did you actually say to alumni when emailing them?

A: Most of the time I just asked for advice – “I’m so-and-so and graduated from ________ recently, I’m looking for a job in __________ now and wanted to get your advice on what I should be doing.”

When we met in-person, some people were very direct – they would just say, “OK, so what do you want me to do exactly?” whereas with others it was more of a relationship and they seemed interested in getting to know me.

Q: OK, so you asked them for advice and met with many of them in-person… what about follow-up? I get a lot of questions about how to follow-up and how often to do it. What was your approach?

A: I just emailed everyone after meeting or speaking with them the first time – but I didn’t stay in touch with every single person I met on an ongoing basis.

My approach was simple: if I needed to stay in touch with people, I did – otherwise I didn’t feel obligated to send anything.

Some people were more open than others, had more contacts to share, or had more advice for me… so I gravitated toward them and sent follow-up questions and requests when I had them.

When I finally landed my offer, I also emailed everyone responsible and thanked them for everything.

Q: You also mentioned cold-calling. Can you walk us through what you did there?

A: It was a devastating process, and I hit rock-bottom multiple times.

I focused my cold-calling efforts on Equity Research Analystssince they don’t get contacted as much as investment bankers do, cold-calling was more effective.

I created a list of around 50 research analysts in my city by looking online and searching for the appropriate industries, and just started calling the firms and asking to speak directly to the analysts.

If I called 50, I found that 45 would not pick up at all, 5 would agree to speak with me and then 1 would agree to meet in-person. One of them actually asked me to create a sample research report for him and deliver it for our meeting!

The odds are definitely against you when you’re cold-calling, and there’s not much you can do about it – aside from getting the basics right, it’s all about brute force.

Q: You mentioned speaking with the analysts themselves, but how did you actually get in touch with them? Most people have trouble getting past the gatekeepers when cold-calling.

A: If I didn’t have their direct contact information, I would call HR and ask to be put in touch with someone in equity research close to my age, or from my school.

This would probably not work as well in investment banking since more people apply each year – but it was effective for equity research, asset management, and private wealth management.

Whither Private Equity?

Q: So you were doing a ton of networking, thinking about all these different industries – and ultimately you won that offer in private equity.

But you haven’t mentioned private equity at all yet – how did it happen? Did you just wake up one morning with an offer letter under your pillow?

A: I wish. I had truly hit rock-bottom 2.5 months before getting the offer, and no longer felt like talking to anyone or doing any networking. But then I got lucky and suddenly all my efforts paid off.

The 200th person I contacted while networking – a commercial banker – had given me some advice and put me in touch with a few other people.

Then one night he went to dinner with another friend of his, a Director in the Private Equity group of an investment bank – and he mentioned my name to the Director and said I was a good guy.

I got the intro because I had done so much networking and met so many people that my contacts started doing the work for me.

Q: Wow. So you just got referred to a private equity interview like that – what was the process like? Were you competing against “normal” people as well?

A: Yup. The interview process took about 2 months, and the whole time I was competing against experienced bankers and equity research guys who wanted to move into PE as well.

Most of the interviews were behavioral, and by this point I had gotten really good at those. For a lot of questions I didn’t even have to think before responding – I had been through so many interviews and informational interviews that the process was just mechanical.

Q: Right, that’s definitely another advantage of networking. But I’m sure they had some concerns about you since you had no full-time work experience – what were the biggest obstacles you faced?

A: The whole time, they liked my personality but doubted whether or not I could do the work.

I was up against investment bankers and equity research associates, so they had a lot less to prove than I did.

But I continued to perform well, and eventually we got to a point where they had to make a decision and give an offer to one of the remaining candidates.

Q: So what did this final challenge consist of? Moving boulders uphill? Catching fish with your bare hands? Opening a gateway to a parallel universe?

A: It was much simpler: they wanted me to spend 3 hours writing a 1-page memo recommending either Coke or Pepsi for investment.

I didn’t get a “formal” case study with an LBO model and valuation, or anything like that – I did use some numbers in my analysis, but it was qualitative and more about coherently presenting the merits and risks of an investment.

I submitted it over the weekend, and found out about my offer on Monday.

Q: That’s amazing. So how did you beat all these experienced bankers for the job?

A: I found that enthusiasm and excitement were the most underrated factors.

A lot of the guys I was competing against were clearly burned out and not enthusiastic at all about getting another job in finance – and that’s where I beat them.

People like to obsess over technical skills and trivia about obscure tax laws, but when you start working you’ll forget all that and you’ll have to look it up anyway… and financial modeling is not rocket science, you can pick it up as you go along.

Q: So you went from sub-par grades, no summer internships, no full-time offers, and no longer even being a student to a full-time private equity offer. Anything you would have done differently?

A: I wasted time applying online early on. While it “feels” productive since you’re sending documents and clicking buttons, you’re being active rather than productive.

I should have done all the in-person networking I did in later months much sooner.

Having good grades and solid internships certainly helps, and if mine had been better I would have had an easier time – but networking is actually more important than either of those, because hardly anyone does it.

Students especially like to sit in their comfort zones, sit around applying online, and trying to get perfect grades when they should be out there pounding the pavement from day 1.

Q: Awesome, thanks for your time and good luck with your PE offer.

A: Sure thing, anytime.

NOTE: Before you get your hopes up from this story, realize that it was written in 2010 and describes events that took place in 2009-2010 (a LONG time ago). Today, this same type of move would be almost impossible because you now need a sequence of internships to win a role in investment banking or private equity.

“Last-minute” networking won’t work as well anymore. And “taking a trip to Europe” right before you start looking for a job is a terrible idea that would sink your chances of winning an offer.

You can still learn a few useful networking tactics from this story, but you should NOT assume that you can do the same thing in today’s recruiting environment.

If you’re under the age of 35, please read the message above closely – before you get distracted by your phone.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

Break Into Investment Banking

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

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by Brian DeChesare Comments (59)

Why You Can’t Get an Investment Banking or Private Equity Job via Recruiters – And What to Do About It

Why You Can’t Get an Investment Banking or Private Equity Job via Recruiters – And What to Do About It

While most of the interviews on this site have been with job seekers or with current investment bankers, today we’re going to change things up and speak with an investment banking and private equity recruiter who works at a well-known recruiting firm.

You’re about to learn some little-known, highly valuable, and controversial information about the finance recruiting industry.

Keep reading to find out how to impress recruiters and interviewers and land PE and investment banking offers.

Where Did It All Begin?

Q: Can you tell us about your firm and what types of candidates you focus on?

A: Sure. We started off specializing in placing ex-military candidates, and since then we’ve expanded into almost 20 other industries, including accounting and finance.

Within investment banking and private equity, we focus on $200K – $1M total compensation per year positions. This corresponds to entry-level positions up through the mid-level – we do a few Partner and MD-level searches occasionally, but they’re not our core focus.

We work with a wide range of banks, but on the buy-side we concentrate on funds below $1B AUM and usually funds in the $50 – $500MM AUM range.

Q: How’d you get started doing this? I know sometimes investment banking analysts make the move over to the recruiting side – were you coming from that background?

A: No, I started off doing recruiting for general “Analyst” positions across all industries.

That was ok, but I found that I liked private equity and investment banking recruiting more because the fees were better and placement took more time – so you could focus more on a few key clients rather than spreading yourself thin.

While some investment banking analysts want to make the move into recruiting, they often fail to realize that technical skills matter very little for recruiting – it’s a sales job, not an analytical job.

You need to be a quick thinker and good on the phone – knowing the in’s and out’s of models and how an M&A deal works is ok, but you only need to know these topics at a very high level.

Q: You mentioned that you don’t do many Partner-level searches – but wouldn’t you earn far higher fees by placing these types of candidates rather than lower-level people?

A: While the fees are higher, there are a couple problems with Partner-level searches:

  • Usually it takes 6-8 months to place a single candidate.
  • All searches at that level are highly confidential, so making introductions and maneuvering the process has an added layer of complexity.

Overall, we’ve found that sub-$1MM range candidates are the best to work with because the chances of placing them are higher and because it’s not quite as extended a process.

How to Boost Your Interviewing Skills by 200% in 15 Minutes

Q: When you first emailed me, you mentioned 3 qualities that every successful investment banking or private equity candidate needs to show when they’re interviewing – what are they?

A: You need to demonstrate 3 specific skills when you interview:

  1. How you made money for your firm in the past.
  2. How you saved them money.
  3. How you improved a process.

The #1 mistake that you can make is focusing too much on your technical prowess and not enough on how much money you will make for a bank or PE firm.

Talking about models in interviews is fine, but you always need to tie them back to business results.

I get people who come in and start rambling about deferred tax liabilities and their hyper-advanced LBO models, and they miss something very important: most VPs and MDs don’t even remember how to build a model or use Excel.

What they do understand is making money or saving money, so you need to re-frame everything you’ve done in that context.

Q: Right, that makes sense – but a lot of people may not have “business results” to point to. Let’s say you’re working on a deal that never goes anywhere – how would you talk about how much money you made or how much money you saved your client?

A: You could talk about partial or potential results if you don’t have concrete numbers to point to.

Here’s an example: let’s say you’re creating a list of potential acquisitions for your client and you’re making recommendations on which ones they should pursue.

Even if this deal doesn’t advance to the final stages, you could easily talk about how much money you saved them if you can point to any acquisitions that you crossed off the list:

“I had to research potential acquisitions for our client – we got it down to a list of 10, and then I recommended taking 4 of the companies off the list because they weren’t a fit with the client’s product line. Any one of those would have cost them over $100 million, so I helped them to avoid a potentially bad acquisition and saved money in the process.”

If you worked on a merger that never went anywhere, you could talk about your model and key findings within that got your client a higher price if they were selling, or a lower price if they were buying.

Or you could always tie your work to the client coming back to you for more engagements in the future:

“The client was impressed with our work and especially the recommendation to avoid those acquisitions, so they decided to come back to us for 2 more engagements – I did the work that led to those, with a total fee potential of $10 million.”

Q: Right, that makes a lot of sense. Firms want people who can make them money or save them money – but is this true even of non-Partner-track positions?

If someone is just going to work there for 2-3 years and then go to business school does it really matter?

A: Yes, because there’s no such thing as “predictability” when it comes to IB or PE careers.

People come to me all the time and say, “So, where will I be in 10 years if I go to this firm? Can you give me an exact blueprint of my future career?”

Sure, here’s your blueprint: you make a lot of money for your firm and you move up. You don’t, and you’re out.

It’s really that simple: no matter what they say about you, if they see in you the potential to make them a lot of money in the future, you move up.

Q: Ok, I see – so there’s less of a “path” than most people think. What other key mistakes do candidates make when recruiting for finance jobs?

A: I could probably write a book about key mistakes, but here are just a few more:

  1. Not proving that you can evaluate and run a deal by yourself.
  2. Focusing too much on features and not enough on benefits.
  3. Relying on pedigree rather than results.

For #1, private equity firms might look at hundreds of deals each month, but might only invest in 2-3 per year max. Principals don’t have time to sift through all the information and evaluate every single detail – they need someone who can step up and do everything on their own.

Even at the entry-level in private equity, you’ll be coordinating with lawyers, bankers, the debt financing team, the company’s executives, and more – and you need to be comfortable doing all the work for everyone else and driving the process.

On #2, this is just a classic sales mistake: too many people go in there and say, “Well, I have a 4.0 GPA from Harvard and I worked at Goldman Sachs.”

Guess what? Those are features, not benefits.

How will you make me money? How much money have you made or saved for other people in the past?

Whenever I meet a candidate for the first time, I make him/her write down 10 things that are great about himself/herself.

Even if it’s “I’m great at baking cookies, so you can enjoy great food if you hire me” that’s better than nothing – the point is to always present benefits rather than features.

#3 is related, but I see a lot of people from Ivy League schools and bulge bracket banks expecting the world just because they have well-known names on their resumes.

It doesn’t work like that: you need to deliver results if you want to advance.

Often, candidates from less privileged backgrounds perform better because they’re twice as motivated.

Q: I also get lots of questions from people with Liberal Arts backgrounds who want to do banking or PE – how should they position themselves?

A: Actually, if you have a liberal arts background that can often be a big advantage because you’re probably much better at talking and BSing than math/science/finance nerds.

You want to position yourself as someone who can tell a good story around the numbers rather than just cranking out models all day long.

When they ask about your weaknesses, don’t say your analytical skills even if you’re tempted to mention that – pick something more qualitative and show how you’ve improved over time.

How to Work Effectively with Recruiters

Q: Thanks – those tips should be really helpful to anyone preparing for interviews right now.

What do recruiters actually do? Is it just a matter of screening resumes and making introductions?

A: We do some filtering of candidates, but it’s more than just looking through resumes and deciding which ones we want to pass along.

To give you some numbers on how the process works, here’s what I did over the past year:

  • Received 7,000 resumes or inquiries.
  • Got interviews for 42 candidates.
  • Successfully placed 10 candidates.

These numbers improve a lot when the economy is better.

A lot of what I do on a daily basis is helping clients find very specific candidates – they no longer just come to us and say, “We need an investment banking analyst.”

These days it’s more like, “We want an investment banking analyst from Barclays Energy Group who worked on a specific recent deal, grew up in the UK, spent time in the Middle East, and can also play golf with under an 85 handicap.”

A lot of my time is spent looking for these types of people, and also with preparing our candidates for interviews and helping them to sell themselves more effectively.

It’s a huge myth that recruiters only forward resumes to firms.

Recruiters are also your best source if you want to do a secretive job search and keep everything on the DL – if you just go directly to an MD, he won’t care about your privacy. He’ll just call your current MD and ask how good you are.

Q: I get a lot of questions from readers without investment banking or private equity experience wondering if they should contact recruiters to help with the job search process.

Is there any point in doing this?

A: Short answer: no. Over the past 2 years I haven’t placed a single candidate who wasn’t a 9/10 match for the job.

If the economy is booming and banks have ramped up their hiring, you can still potentially come in with an unrelated background (e.g. do marketing at a Fortune 500 company for 2 years and then move into IB), but it’s pretty rare otherwise.

It’s not that you’re unqualified – but we just have so many people who do have finance experience lining up for jobs that it’s almost impossible unless you’re the Chairman’s son or you can bring a unique skill set to the table.

Q: OK, so what should people without the required experience do? How do you get noticed if you’re not a perfect match for the job?

A: Become your own recruiter. Make a list of firms you want to go after, go to LinkedIn, look up people at those places, contact them, call them, visit in-person and start introducing yourself like that.

Then once you get to know a bunch of people at a specific firm, you can come back to me and say, “Hey, I’ve made some inroads on my own and know these 10-15 people – now that I’ve done that, what can you do for me?”

That puts you in a much better position to interview there, and we can help you a lot more if you’ve already done some of the work yourself.

Also, look up jobs on Indeed.com – other sites are OK, but I’ve found that Indeed is the best for finance. Just search for “banking analyst,” don’t narrow down the region, and see what you can find there.

Some of these listings are for “ghost jobs” – they’re not actively recruiting at the moment, but they’re collecting resumes and will contact you when they’re ready.

A lot of bankers apply and expect to hear back the second they submit their resumes, but it doesn’t work like that – expect to wait up to 3 days for any “live” jobs.

Q: You’ve mentioned how much more specific clients have become with their requests. What else has changed over the years, and specifically what happens when the economy has softened?

A: A lot of regional boutiques and lesser-known firms suddenly get the attitude that they can pick up analysts at top bulge bracket / boutique banks simply because the market is bad.

They come to us and say, “So, can you pull out the top analyst at Goldman or Moelis and send him to us right away, for half the pay?”

But it doesn’t work like that – even in a terrible market, top performers are unlikely to leave unless they have a really, really good reason to do so.

Some candidates have decided to go and speak with these types of firms anyway, but very few actually make the move from a top bank or group to something lesser-known.

Q: Awesome, thanks for your time – learned a lot!

A: No problem. And let me know if you know of anyone who shoots under 85 and is a killer chef so I can refer them to my clients…

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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