1 – Have a Clear Vision of The Private Equity Market in France

Securing an internship or a permanent contract in Private Equity is as challenging as a novice horse rider aiming to complete a flawless obstacle course. It requires a lot of preparation, so start thinking about it from the early years of your studies.

Before crafting the perfect CV, preliminary work needs to be done. First, research the different types of funds in Private Equity: whether it’s about their nature (primary, secondary, “mino”, “majo”), their size (Small, Mid or Large Cap), or their sector of activity (TMT, FIG, health). You need to know which type of fund suits you best. Once this first step is completed, it is necessary to study the different funds in Paris and their teams. When applying, you need to have a real understanding of the fund ecosystem and their culture.

2 – Understand the Team Culture

Before going to an interview, always do your research on the team, the background of the members, and their interests. Teams are small, so it’s essential to “fit” with them: understanding a fund’s culture is primarily about understanding the people who make it up. If they all went to business school and were active members of an association, it’s tricky to declare “I’ve always refused to join an association, it’s a waste of time”. Similarly, if it’s a multicultural team with notably dual nationals, you need to demonstrate an attraction for travel or the discovery of new cultures.

You need to provide as many elements as possible that show the common points between the candidate and the fund they wish to join. Thus, one element not to be neglected in your preparation is the construction of your network. Effective networking is exchanging with as many people in the sector as possible, which not only maximizes the chances that your CV will be put at the top of the pile during the process, but also and above all gives you a more personal knowledge of the fund.

3 – Be Aware of the News of the Funds to Which You Are Applying

It is crucial to know all the elements that concern it. Arriving at an interview knowing nothing about the team, the strategy, or the companies is prohibitive. It is very easy to find information online, especially on the funds’ own sites which provide the number of assets under management, fundraisings and their amount, their investment sectors as well as the list of companies in which they have invested.

4 – Be Technically Ready

You need to be ready even before applying, as it can go very quickly between sending the application and the moment you are called back for an interview. Places in the field are very expensive, so you must not fail on technical questions or on modeling tests.

5 – Know How to Talk About Your Tasks

Whether it’s an internship or a permanent contract, applying for private equity implies that you already have experience. 90% of people applying for an internship and all candidates for a permanent contract are people who have already worked on M&A deals, whether it’s on financial or market aspects. You should always be able to talk about the deals mentioned on your CV, but also have a complete understanding of these operations. Otherwise, it can suggest that the candidate has not really worked on the transaction or that they have just filled in a random deal.

6 – Think Strategy, Not Just Finance

To distinguish between two similar profiles coming from M&A or TS, recruiters will observe their way of reasoning, of seeing the big picture. They will not only seek to know if there is a sector that may interest them more than another, but especially if they know the factors that stimulate a particular sector. For this, the interviewer will test the Business Sense of the candidates: you must therefore know how to talk about the market and not just about the numbers.

7 – Have a Critical Mind

“Is there a company in our portfolio in which you would not have invested?” is a question that comes up very frequently during Private Equity interviews. Many candidates are afraid to answer it for fear of offending the interviewer when they are actually expected to express their thoughts through solid argumentation. It happens that a fund makes a bad investment or that one does not agree with an investment, but you must know how to explain it with arguments, figures, and market information. Indeed, you should not always go along with the interviewer thinking that you are pleasing them, quite the contrary.

8 – Do You Have Other Processes ?

Be careful with this tricky question. When applying for an internship in Private Equity, it can be well seen to say that you have other processes, provided that these various applications are coherent. Thus, for a position in a Mid Cap fund, the recruiter will not understand that the candidate attests that they are in process in Large Cap funds. This can give a bad signal to the interviewer who will believe that you are applying to all the establishments of the financial place, just to integrate Private Equity, no matter the funds and their specificities.

9 – Never Talk About Remuneration

If you go through a headhunter, you must be transparent about your current remuneration: whether you come from M&A, strategy consulting or TS, salary scales are known, regardless of the level of seniority. The headhunter knows how much everyone earns, so lying to them is also counterproductive. Far from it, they are there to help the candidate and tell them if the opportunity for which they are applying is consistent with what they have today or not.

10 – Always Respond to a Headhunter

For their recruitment, 90% of Tier-1 Private Equity funds use headhunters. If they write to you at some point in your career and you are not interested, a simple but precise response is enough: “Thank you for your message, but I am not looking to make a move at the moment”. A candidate who ignores a headhunter sends a very bad signal, and when they seek to join PE a few years later, they will be put on the back burner. Moreover, in a Private Equity process, the headhunter is the one who links the candidate and the recruiter, so it is essential to maintain a good relationship with them.

Private Equity is a type of investment that involves equity firms pooling together funds from various sources such as pension funds, institutional investors, high-net-worth individuals, and other sources to invest in private companies. Private equity funds are typically managed by private equity firms that raise capital from limited partners and invest in a variety of opportunities, including buyouts, growth capital, mezzanine financing, and distressed investments. If you are interested in joining the private equity industry and success Private Equity interview, there are several ways to get involved.

Few professions arouse as much interest from students in Grandes Écoles as Private Equity. Indeed, beyond the prestige and levels of remuneration, Private Equity is a fascinating profession thanks to the financial, entrepreneurial, and strategic expertise it requires. However, investment fund teams are often very small, so there are few job offers. This gap between the supply and demand of young graduates for this profession makes recruitment extremely selective. Anne-Sophie, a headhunter for Private Equity funds at AE SEARCH, shares all the secrets to succeed in your interviews today. You will discover how many rounds a process in Private Equity contains, what they consist of, and how to best prepare to land an offer.

How many interviews in a Private Equity process ?

Before applying to a Private Equity fund, you should be sure to be well prepared, because once a process is launched, the first step can come very quickly. For an internship in Mid or Large Cap, there are generally 2 to 3 rounds of interviews. The goal is to meet as many collaborators as possible.

In a classic process, a student is likely to meet 2 Associates during the first round of interviews, then 2 Principals (or 1 Associate and 1 Principal) during the second round of interviews.

As for a permanent contract position (after a few years of experience), there are no rules: there can be between 4 and 12 rounds of interviews.

The process varies depending on each fund, its size, and the number of people per team. For example, for a Large Cap fund with offices in Paris and London and whose teams work regularly together, the candidate will meet many more collaborators than in a normal process.

A typical process for a permanent contract (CDI) in a Mid Cap or Upper Mid fund after 2-3 years of experience usually consists of the following steps :

• Round 1 : Fit/motivation interview with a Principal/VP (usually in charge of recruitment)
• Round 2 : Fit/technical interview with Associates
• Round 3 : Case Study followed by a debrief with team members
• Round 4 : Meeting with a Partner
• Round 5 : Meeting with another Partner
• Round 6 : A drink or lunch with all team members for some funds

What should I expect as questions in a Private Equity interview ?

A Private Equity interview round can either be a fit/motivation round or a technical round. There are generally 6 to 7 steps in a recruitment process to join a Private Equity fund.

1 – Questions about your background

The candidate must be able to present themselves in a synthetic way by giving important elements about their background. You should be able to go through your CV, both your academic background and your professional career.

The recruiter will challenge the candidate on their academic and professional journey. The candidate must be able to indicate and detail the missions, M&A deals, or Due Diligences they have worked on (whether as an intern or a permanent employee). If the candidate mentions the Tiffany / LVMH deal on their resume or in an interview, the interviewer may ask them to elaborate, ask their opinion on the transaction. Is it a good acquisition, especially considering the state of the market? What do you think of the luxury market? Would you have made this acquisition?

For someone in strategy consulting, the interviewer can question them about a Due Diligence they carried out for an investment fund. The candidate must provide as much information as possible to the recruiter while respecting the confidentiality of transactions that are not public.

Therefore, one must always be able to explain all the lines on their resume. Mentioning a deal on their resume but not being able to talk about it in an interview can be a deal-breaker.

2 – Motivation Questions

These are fairly standard questions that allow the recruiter to understand the candidate’s motivations and why they are in front of them. The candidate must be relevant in their speech and must be able to clearly explain why they want to do Private Equity and why specifically in Small, Mid or Large Cap. Similarly, they must be able to explain why this particular fund interests them: company culture, team culture, investment strategy, etc.

Such questions quickly identify whether the candidate has applied because they are genuinely interested in the team or because they are simply looking for a place in a fund to leave M&A or strategy consulting.

The candidate must be able to construct a coherent discourse to express their motivation both for the position and for the fund : saying that they are in the process with Large Cap funds while they are in an interview for a Mid Cap fund can be very compromising.

3 – Fit questions

Naturally, over the course of the discussion, the interviewer will be able to determine whether or not the candidate and their personality are compatible with the team. Indeed, Private Equity teams are small, so the candidate must be able to get along with everyone. It is possible to judge the fit based on the attitude in the interview but also on interests and activities outside of work. It is clear that a candidate and a recruiter who share a passion such as golf or a particular style of music is a positive point that will facilitate the candidate’s integration.

4 – Technical questions in Private Equity interview

This is the part most feared by candidates. The questions asked generally concern the LBO model: one must know its main characteristics, understand how it is constructed, and be able to easily explain it. The candidate may also have to answer more traditional questions that can be found in an interview to join a bank. M&A : steps of a deal, accounting or valuation questions.

For a permanent contract (CDI), the questions will be more in-depth. For a simple internship, the candidate will be asked to complete an LBO Paper, while for a permanent contract or Graduate position, the candidate will have an additional interview round to complete an LBO case.

5 – Business Sense Questions

The interviewer will seek to know if the candidate can think beyond the numbers. This is a strategic part where one must be able to show the recruiter the extent and relevance of their research: knowledge about deals, sectors, different markets.

Few examples of Business Sense Questions :

• Could you talk about one of our portfolio company ?
• If you could invest in a company, which one would it be ?
• Is there a company in our portfolio that you would’nt have invested in ?

6 – LBO case / Strategic case

This part is reserved for people who already have 2-3 years of experience and want to join a Private Equity fund on a permanent contract (CDI). In principle, it’s a case that lasts either 3 hours, or between 24 and 48 hours. However, there are no rules and everything depends on the format chosen by the fund.

Starting from an Investment Memorandum of 30/40 pages with a lot of information about the target company, the candidate will have to create an LBO model from scratch. This allows to test their abilities to model quickly as well as their technical skills.

Following this work, the interviewer can decide to go further in the LBO case by asking more strategic questions such as : “Now that you have done all this modeling work, would you invest in this company ?”

7 – Informal meeting with the team

Once at this stage of the process, the team already has a very good idea of the candidate : they have passed all their interviews, but the goal is to see if they will get along well with the entire team. During an informal cocktail or lunch, the team will observe how the candidate behaves and reacts in society: Do they have a sense of humor ? Can they bounce back on certain elements said by their colleagues? Do they have confidence in themselves? These are all elements that can predict how the candidate may behave during a professional exchange. This informal meeting is therefore a decisive step in the recruitment process and the slightest mistake or inappropriate remark can jeopardize the entire process.