Posts Tagged ‘private equity’

Ace the Case: How to Flex Your Intellect in a Case Interview

Tuesday, July 29th, 2008

Case interviews are great opportunities to showcase your smarts. They’re designed to assess your ability to deal with complex problems, to approach an issue strategically and thoughtfully, and to reach intelligent conclusions with the available facts in a short amount of time.

In other words, they’re checking out your judgment, intellect and quick thinking. And those are pretty important skills, so it’s wise to prepare yourself thoroughly for this kind of test.

With that in mind, here are some practical tips for a successful case interview. 

1. Listen Carefully

Maybe this sounds obvious, but it’s absolutely critical: listen very carefully to the problem or case. And make sure that you respond directly to the problem at hand, rather than a side issue. One of the biggest mistakes made in case interviews is misunderstanding the question or answering the wrong one. Try to stay focused.

To avoid any confusion, take the time to repeat the question back to your interviewer. This not only demonstrates your excellent listening abilities to your interviewer, but also ensures that you understand what they’re asking you to do.   

And during the case interview, listen closely for any extra information they give you. Chances are these are helpful clues — so pay attention!

2. Outline your Thought Process and establish a Logical Structure  

Case interviews, as we mentioned, highlight your thought processes. The hiring manager wants to see that you follow a rational, structured approach to problem-solving.

How do you do this? Outline four to five major issues that need to be examined upfront before you can address the big issue. And then describe your overall problem-solving approach to your interviewer. This demonstrates to your interviewer that you can take a complex problem and break it down into manageable components.   

The natural conclusion for your interviewer? That you’re logical, thorough, and mentally organized.

As part of your explanation, share why you are addressing each point, and convey where it fits into the overall problem at hand. If any part of your approach is wrong or missing something, the interviewer has a chance to redirect you at that point.



3. Ask for More Information


If you find yourself needing more information relax it’s perfectly acceptable to ask for clarification. In fact, most interviewers expect you to ask for it. Most of them want you to ask for it.




But, again, make sure you understand where each question fits into the overall picture. Don’t make the mistake of firing off a bunch of questions without understanding where they fit into the bigger picture, or without explaining to the interviewer why you need the information.



4. Talk it out


And this is why you need to talk it out: because the employer is far more interested in your thought process than the actual solution. So do your best to verbalize your mental journey, to walk your interviewer through your problem-solving process.

In some cases, you’ll run out of time before you even have the opportunity to present your conclusion. In these situations, it’s even more important to talk through your reasoning out loud.



5. Step back and Summarize from Time to Time


Take time to step back periodically and summarize the conclusions you have been able to form so far and what the implications may be.



This is especially helpful when you don’t have the time to talk through all the key issues or the entire case. The summary demonstrates to your interviewer early on in the case that you can synthesize information and draw conclusions.



And remember that the whole point of the case interview is to understand your ability to think and reason logically so don’t get hung up on solving the mystery. Rather, pour your energy into demonstrating a logical thought process.



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Three Good Ways to Answer the “What’s Your Weakness?” Question

Monday, July 21st, 2008

It’s the most dreaded question in any job interview. “What’s your greatest weakness?”

Everyone fears it, and no one knows how to answer it. Plenty of us have tried to pass off canned answers like “I’m too much of a perfectionist” or the always popular “I’m a bit of a workaholic.” If you haven’t found out already, these just don’t work.

Chances are your interviewer has heard them before. So she’ll probably turn around and say, “Well, that sounds like a strength to me. Can you give me another weakness?” And then you’re back where you started from.

So, what is the best way to respond to this question? The key is to understand why hiring managers ask it in the first place. More than anything, they want to see how you’ll respond how well you maintain your composure under pressure.

With that in mind, here are a few ways to tackle the dreaded “what’s your weakness?” question.

Tip #1: Only admit to a minor weakness 

Cop to a small weakness — but one that could also suggest an upside. Instead of trying to pass off a blatant strength as a weakness (e.g., the perfectionist line), go ahead and confess a small weakness that more subtly hints at a positive flipside.

Admit, for example, that you are impatient. That’s a weakness, yes, but it also indicates that you’re high-performing (i.e., not lazy).

An even better way to present that weakness: “I work at a fast rate and find that I need to be more patient with those who don’t.”

Tip #2: Admit a weakness that can be fixed

With this tip, we take that advice a step further. After acknowledging a weakness, explain to the hiring manager what you’re doing to address it.

Let’s use the “impatient” example again here. If you admit that as a weakness, follow up by adding that you’re working on communicating expectations with your associates to help make sure everyone is on the same page. Under the right circumstances, this  strategy can really pay off. Because it not only shows the employer that you’re actively trying to improve, it also shows that you take initiative and have leadership skills.  

Tip #3: If you do confess a real weakness, make sure it’s not a red flag

You don’t want to be that candidate who blurts out potentially damaging information by revealing a real, serious weakness. We all have our flaws, but we don’t need to shout them from the rooftops (especially in a job interview)!

The key is not to disclose anything that can make you seem like a problem worker. Saying things like, “I’m not a team player” or “I’m typically late” will set off serious alarms in the mind of the interviewer. Maybe those are obvious. But what if you say essentially the same thing in less direct words?

If you’re frequently late, for example, or you procrastinate, you might dress it up by saying, “I need to work on my time management.” Sure, that sounds a little better than words like “lazy” and “procrastinator”, but your interviewer’s going to reach the same conclusion regardless.

So if you do decide to disclose a real weakness, choose one that is irrelevant to the position you’re up for (e.g., if you’re working with numbers all day, you could say that you’re not a fantastic writer).

Coming up with one answer is hard enough, but I recommend jotting down four. Why? Because I’ve often heard the “what’s your greatest weakness” question come in the form of “tell me your top three greatest weaknesses.” Scary, but true!

Prepare for the worst-case scenario, and hope for the best. And do not forget: practice, practice, practice. Rehearse your answers out loud so you can breeze right through the trickiest question without breaking a sweat.

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Interview Tips Part 2

Thursday, June 12th, 2008

Here is the second half of our Interview Tips:

1.  When you arrive at the office make sure that you treat everyone you meet with respect and consideration. You need to make a positive impression on everyone for you never know who has a say in your candidacy.  I actually know one firm which will question everyone who meets the candidate from the receptionist up, and all of their input has value.

2.  When you meet your interviewer make sure to look them in the eyes and greet them with a firm hand shake.  Remember your manners. In today’s world they can set you apart from your competition.

3.  When you meet your interviewer make sure to look them in the eyes and greet them with a firm hand shake.  Remember your manners. In today’s world they can set you apart from your competition.

4.  Show your passion for the investing.  People want to hire people who have the passion for the same things.

      5.  Always remember to write a Thank You note and yes they can be emailed, emailing the note does get it to the recipient much quicker then any other method which can show passion and keep you fresh in their mind. A hand written note goes very far in today’s world if it is received within 24 hours and is readable. Try to write a thank you note to everyone you meet with for at least 10 minutes, so make sure to get business cards.

Private Equity Paths

Tuesday, June 10th, 2008

Not all Private Equity firm are alike and it is these differences which intelligent and professional candidates need to identify to be successful in obtaining a role with a Private Equity firm.  Although this is a somewhat broad brush stroke the argument can easily be made that there are two main types of Private Equity funds: transactional and operational.

For candidates interested in making a career in the Private Equity space they must first understand the nature of the business so they can know not only who to apply to for  a position but more importantly how to properly position themselves with each firm.

A transactional fund looks for deals where they can pay below book value or the smallest premium possible for an entity and then resell the entity in a few months to a competitor/partner or perhaps a few years for larger premium.  These funds are looking for an entity that may be out of favor at the present time but within a couple of years “at most” they believe will be highly desired.  Furthermore they look for an entity which they believe may be worth more money broken up into smaller pieces, rather then kept whole.

These firms are looking for people with strong investment banking experience accompanied with solid transactional experience.  They want financial modelers and individuals who can identify value within the different parts of the capital structure of an entity.  These transaction oriented firms typically hire from the major investment banks and in a down market such as the present one, they may hire senior investment bankers. 

An operational fund looks for deals where they can acquire an entity which they feel is being mis-managed or run inefficiently by present management.  Or they may be looking for deals where a company is searching for additional capital or operational expertise to perhaps increase their product line or build a new factory to increase production.  

Since this value is predominately achieved by streamlining operations and enabling the firms to run more effectively these Private Equity funds look for individuals who possess operational experience. These funds recruit heavily out of the management consultant ranks and other operating companies. They value candidate with real life experience and in many cases either proven operators or individuals with a strong operational foundation.

Since there are two types of funds it is very important for candidates to not only understand the value their experience offers the funds, but also which funds will properly value this experience due to their firms investment strategy.  Furthermore it is very important for candidates to know what type of work they enjoy performing. Obviously there are big differences between these two strategies and the professional career paths that are associated with these two types of firms. 

Interview Tips Part One

Thursday, June 5th, 2008

For today’s recruiting focused Blog I wanted to offer some Interview Tips which in today’s market seem to be even more important because you need to set yourself apart from the competition in order to get that exciting new job.

  1. Always be prepared for your interview.  Prior to your interview visit the firm’s website and carefully review the entire website. This also includes reading the papers the morning of your interview or searching the web to see if any articles have come up regarding the firm where you will be interviewing.  If you have access to a Bloomberg machine I would suggest looking up the firm right before your interview.  In the case of most Hedge Funds this will require you receiving a password from the firm prior to the interview.  Most firms are very open to providing you the password if you ask, so ask!

  2. Plan to arrive 5 to 10 minutes early to any interview.  This provides you some extra time if something should go wrong.  As well if the firm requires you to fill out an application this will enable you to start the process earlier and not be rushed.  If an application needs to be filled out complete it to the best of your ability at that time, if need be send a follow up email with additional information.

  3. When reviewing the firm’s website make sure to read the bio of the individual who is interviewing you if available.  Your goal is to find a commonality between the two of you which you can offer during the interview. This shows that not only have you reviewed their website, i.e. done your home work, but also when you leave he will have something meaningful to remember you by.

  4. Try your best to be properly dressed for the interview; this has become much harder in today’s more casual marketplace.  Some firms still wear suits while other have gone business casual.  If you can identify the environment of the firm feel free to wear what ever is the firms environment but otherwise I would always suggested wearing a suit.  If you are worried a suit may be too formal, put a fun tie into the outfit, this will show your personality, and most likely one of your passions.

  5. Ask well thought out questions, questions which show you have prepared yourself for the interview.

Tip’s 6-10 next week!

Response to Comment from Blog

Tuesday, June 3rd, 2008

“In my job search I’m seeing quite a few “Private Equity Investor Relations Associate/Analyst” listings. Is there a clearly defined career path for these roles? Do the infrastructure roles enjoy the same “carry” opportunities as the investment side?”

Comment posted by Gary P. in response to an earlier blog posting. 

The career path for an Investor Relations professional is not very well defined within the Private Equity space; and this role can actually lead to many different roles including Director of Marketing, Chief Operations Officer, and Managing Partner.  To reach these higher level positions typically requires that the professional must join another firm where their rolodex will be extremely valuable, although this is not always the case.

An Investors Relations professional’s greatest value is their rolodex and their ability to raise assets using their rolodex.  As a more junior Investor Relations professional one learns “how the game of raising assets” is played. 

As you learn these skills, you will have constant interaction with both present clients and potential clients, including Investment Consultants; your network and rolodex will be constantly growing.  It is extremely important at that point to learn how to manage your rolodex effectively in order for you to provide a high level of service which will enable you to take your rolodex with you to another firm.

During the interview process both you and your rolodex will be interviewed. It is very important for you to truly understand your rolodex and both its strengths and weaknesses.  For instance do not interview with Real Estate strategy fund if your relationships focus on equity investments.   Many professionals will say understanding one’s rolodex sets apart a good Investor Relations/Marketing professional from a bad one. 

A good Investor Relations/Marketing professional understands how their entire firm operates and in many cases these professionals possess the keys to the assets i.e. client relationships and this is why they can become Chief Operating Officers or Managing Partners. 

Although most junior Investor Relations professionals do not receive a defined part of the “carry” they do receive a performance driven bonus usually based on a couple of stats including assets raised, assets kept, and the fund’s overall performance.  As an Investor Relations professional becomes more senior and starts to handle more marketing and operational duties within the firm they almost always have a defined percentage of the “carry.”

In regards to Infrastructure roles as a whole, these positions typically do not receive a defined part of the “carry” until they are more senior within the firm, such as Director of Marketing, CFO, COO, or Partner.  The lower level roles do receive a performance driven bonus which comes from the funds fee pool but they rarely are offered a defined percentage of the carry. The bonus is usually calculated by a combination of qualities including fund’s performance and employee’s performance.  The bonuses paid to more junior professionals are usually paid on a yearly basis and sometimes a small bonus is paid at the completion of a capital transaction.

What Hedge Fund Strategies will be the best in 2008?

Friday, May 30th, 2008

As we get ready to enter the last month of the first half of 2008, I find myself trying to determine which Hedge Fund Strategies will end 2008 not only up but be the top performers. 

Presently there seems to be a few strategies that are positive for the year (at least up until May 1st the most accurate recent numbers I can find); such as Risk arbitrage and Managed Futures.  But the majority of strategies are down for the year. 

As I look over the different strategies there are three which I believe will be up by the end of the year:

  1. Industry focused Long/Short Funds
  2. Event Driven
  3. Credit Arbitrage


I will be the first one to admit that most people feel some of these strategies will have a strong second quarter such as a Financial Services focused long/short strategy and a Credit Arbitrage strategy.  But what sets my opinion part is that although I believe that Financial Services focused long/short funds will have a strong year, I believe that some other sectors will be even stronger. 

Event Driven funds may surprise many investors in the second half. I believe these funds will perform very well because as the credit crisis resolves itself all of the money that is on the side lines will be put to work to purchase solid assets at a significant price reduction from only a year or two ago. This money includes Private Equity and Hedge Funds as well as corporations who are looking to grab market share for a fair value.


Also, I believe Credit Arbitrage may become the hardest place to make money simply because so much money will be chasing after so few deals.  But if you are invested with a well connected proven player in this strategy I believe you could have a very strong return year, even though the risk is still very high.

We still have a long time 7 months until 2008 is over and who knows what the second half of the year will bring, but I know I am excited to watch. What strategies do you think could be money makers in 2008?  



The Changes within the Private Equity Revenue Landscape

Tuesday, May 27th, 2008

Over the last few years, Private Equity and more specifically the revenue channel of certain Private Equity Funds has changed drastically.  In the past Private Equity firms have always charged a management fee and a performance fee similar to the fee structure of Hedge Funds. The performance fee was usually collected after a capital transaction occurred, such as a portfolio company being sold.

In the last few years, however, some Private Equity Funds have come to realize that two sources of revenue were not enough, and just as important the ability to pay large bonuses only after a capital transaction occurred made these funds less attractive places to work in the eyes of many professionals. Therefore, a few Private Equity funds created an additional revenue source, usually defined as a Special Dividend. 

This Special Dividend is structured to be paid to the company’s owners (the Private Equity Funds), as defined within the initial transaction paperwork.  For instance, it could be paid on the day that the first transaction closed, i.e. the day that the Private Equity Fund bought the company, which in many cases creates a nice one day return.

Another method allows for payment at a set upon date within the life span of the ownership of the company, or if certain goals/targets are reached.  For instance, the dividend could be paid towards the end of a given year, providing the fund some concrete return numbers to show their investors or potential investors while maintaining ownership in the company.  From the Investors perspective they are seeing a return on their money rather then sitting on hypothetical numbers.

For certain investors this new revenue source is seen as a positive concept allowing their Private Equity Funds to wait longer on creating value within their portfolio company, or to wait for better market conditions to sell their portfolio company then was previously possible.  This additional source of revenue enables the Private Equity fund to have more money which can then go back into the portfolio company if the PE fund feels this is necessary. Instead of the portfolio company having to maintain the cash in their accounts, the Fund may now use to their discretion; the revenue channel to help the portfolio company better perform.

Critics argue that these special dividends are just a way for the professionals at the PE fund to receive more compensation, and cause the Private Equity Fund’s performance numbers to look better in the short run.  With their being less risk on the part of the PE Fund, since the fund has basically been paid back a portion of their initial investment, the Private Equity fund may not be as vigilant with their investment.

In many cases to pay this Special Dividend the companies must take on additional debt to make the payment, this applies more debt to the new company’s balance sheet, which in most cases is not viewed upon positively except by those individuals who received the Special Dividend.  This is one of the most controversial aspects of this new revenue source, who does it really help?

Although this source of revenue creation is new and is being implemented by a very small portion of funds it will be very interesting to see how it emerges in the Private Equity space.  The real question is; “Is it here to stay?”  It is probably too soon for us to make a fully educated answer to this question but unless the large Institutional Investors start to object I would guess that it is and likely will become a greater portion of deals to come. 

This is especially true in the case of very large deals where being able to take money off/out of the deal on day one helps to lower the risk for the Private Equity Fund while not diluting their ownership in the portfolio company.  Furthermore this revenue allows the Private Equity Fund to return money to their investors making the investor happy with a return of capital and the Private Equity Fund’s employees are happy with an additional transactional bonus being given to certain individuals within the fund.

I would be very interested to hear from Private Equity professionals and Investors; how do you view implementing a Special Dividend revenue channel? Do they out weigh the fiduciary responsibilities of the fund or is this a concept that will be looked back upon in the future as having had a negative impact on the market?

I ask for individuals to post their thoughts in our comment section of the blog or email me directly.

How to Make the Most of Your Summer Internship

Monday, May 19th, 2008

Ever wondered how to make the most of your summer internship but don’t have the time to read book after book on the subject?  Well, I’m The Résumé Girl and I’ve read all the self-help career books so that you don’t have to and compiled an easy-to-use, at-a-glance “top ten list” to help you make the most of your summer internship.  So, here’s tips #1 - #5 and be sure to stay tuned until next week for tips #6 - #10:

Tip #1  Set personal goals before you startKnow what you want to get out of your internship by taking time before you start to clarify why you are doing the internship and articulate what you hope to get out of it.  Then, set personal goals for yourself by considering what ideas you would like to learn more about, skills you hope to build on, and people you would like to meet.




Tip #2  Bring legal documentation with you on your first dayYou’ll either need a passport or both your driver’s license and Social Security Card as proof of your eligibility to work in the United States.  If your getting paid for your internship, you’ll also need to be prepared to complete a federal W-2 form, so learn about what this document is beforehand and come prepared to complete it on the first day of your internship.




Tip #3  Take the initiative and meet regularly with your supervisorSome internships are more structured than others.  So, if your supervisor does not ask you to meet with him/her on a regular basis, take the initiative and ask them if you could do this.  In this meeting, take the time to ask your supervisor for both positive and negative feedback and also update him/her on the progress of your internship projects.




Tip #4  Maintain a great attitude and always be professionalApproach all tasks with enthusiasm and professionalism no matter how menial the task may be.  Remember that your internship is essentially an extended job interview and to always act professionally no matter how other interns or full-time employees might behave!




Tip #5  Keep track of your accomplishments, projects, and responsibilitiesBe sure to keep track of all of your summer accomplishments, projects, and responsibilities or hire The Résumé Girl to do this for you!  You’ll not only need a comprehensive list of your accomplishments, projects, and responsibilities to help you with your exit interview, but you’ll find that you’ll need to update your résumé at the end of your internship and having this list prepared will expedite the résumé writing process and reduce your stress significantly!




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Resumes for Private Equity and Hedge Fund Space

Thursday, May 15th, 2008

As we have discussed in previous blogs your reputation is extremely important in the close knit community of Private Equity and Hedge Funds.  But what if you are applying to a position and no one in the firm knows who you are? Then a properly worded and crafted resume becomes extremely important.

A well written and composed resume can be the difference between being asked in for an interview or having your resume put in the do not call pile.  The tough thing about creating your resume is there is no one perfect answer in regards to what a resume should look like. However certain styles seem to work better for particular industries and in some cases the preferred resume style may even vary by the roles within the industry.

The typical resume in the Private Equity and Hedge fund space consists of one page and is written in one continuous font and with very little formatting involved.  Your name and the name of you employers may be bold but otherwise there are very few changes.  The resume should also be written in bullet point format with each bullet point being a concise, action oriented comment about your position. 

Although I am not a resume expert, as an executive recruiter I have seen thousands of resumes during my career and I do have a key few points which I believe are very important:

  • Concise bullet point descriptions, action oriented descriptions of your responsibilities
  • No spelling or grammatical mistakes - mistakes express a non detail oriented person
  • Ideally one page
  • Make the resume easy to read, line up company and title as well as the date on opposite side of page
  • If you are coming from an investment banking program, a deal sheet should accompany any resumes you send out
  • If you have any discretionary Portfolio Management duties make sure to include your most recent returns numbers, I would also suggest you have another sheet with your performance number for at least the last 5 years including how they compare to your benchmark
  • Make sure to include any awards you have received from either your employer or peers

Because a resume is such an essential component as one tries to advance their career, has decided to team up with an experienced and knowledgeable resume writer who has direct experience in the alternative investment field.

“TheResumeGirl” possesses hands on expertise in this field. She worked as an analyst for an investment banking analyst program as an analyst before joining a large Hedge Fund and has has written hundreds of financial resumes for professionals in the field. She therefore knows exactly what these firms look for in a resume, and is ready to help them find that in your resume. She will be a regular contributor to this blog and hopefully she will write some articles for our newsletter.   Her first blog, coming this Monday, we believe will be a tremendous help for those students interested in entering this field. looks forward to working with The Resume Girl in the future.