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Your Private Equity Career Path

Private Equity WebinarsIf you are considering how best to chart your private equity career path, this article will help you get started on that journey to 9 West.  By this point, most readers are likely familiar with the standard private equity career path that is described in many articles, anecdotes from private equity professionals, and recruiters.  To summarize this typical private equity career path, I have condensed this into five common steps in the private equity career path:

1) Undergraduate Excellence: The typical private equity career path starts with a stellar undergraduate academic performance (majors vary, business is common but private equity firms also prize specialty and advanced study in mathematics, sciences, and even the arts).  In this stage, the individual tends to excel in business, investing, or otherwise awaken some interest in a career in finance and ultimately private equity.

2) Post-Undergraduate Experience: Around the end of undergraduate education, most large banks, consulting firms, and top firms dispatch representatives and recruiters to campuses across the country to lure top students to Wall Street or the world of business at large.   While there is some evidence that students are moving away to some extent from the time-worn path of investment banking, trading, and working in finance (in favor of, say, start-ups and technology firms) but overall, the salaries, signing bonuses, and career prospects offered by these financial firms remains a strong lure for recent grads, especially given the level of debt many students now carry.   During this time after graduation, most future private equity professionals work a couple of years in corporate finance, investment banking, or business consulting as an analyst.  This time allows them to receive plenty of on-the-job training and prepares them for the long hours, intensive projects, and lifestyle with which many private equity professionals are familiar.

3) Working Toward Private Equity: Depending on your chosen employer, you may start to develop a skill set that fits a particular area of private equity (assuming you have set private equity as a future goal) and you can start to build relationships, study the industry, and ideally even start to work with private equity firms, as some fortunate graduates do as investment bankers.  Whether by luck, a helping hand, or exceptional talent, some professionals manage to start working in private equity early on, before their MBA (or other advanced degree, which is a near-prerequisite for private equity).  This can be an amazing opportunity for someone looking to work in the industry long-term but eventually these professionals meet with less fortunate private equity aspirants in business school (or law school, as is sometimes the case but rarely by design).  The reason they would leave their private equity employer for an MBA is that many private equity firms have pre-MBA associates that remain in this junior position until they receive their MBA; the same goes for most investment banks, which see the MBA as a crucial step in the development of their future executives.

4) Completing Your MBA: Private equity firms look for top students from top business schools so it is important to give yourself the best chance at being seen by recruiters and future employers and landing at a top program (Wharton, HBS, Columbia, etc.).  During your MBA, you will most likely have your sights firmly set on working in private equity and you can gear your curriculum toward this goal.  In fact, a number of top business schools now have private equity clubs and even investment clubs that give students the chance to network, learn the industry, and even work alongside private equity firms on deals in a sophisticated internship model.

Your professors, advisors, and other relationships you build during your MBA will serve you well as you look for private equity jobs following your MBA so be sure to participate in your courses, take on extracurricular activities, and make progress toward your career goal during your time at B-School.  You should also have completed a summer associate program at a well-known, respected firm, ideally a private equity shop but it helps to gain more experience in a relevant position even if it is outside private equity.  A number of young private equity professionals and MBA students have decided to take our CPEP training program to further improve their private equity knowledge and training so that they can hit the ground running and advance in their private equity career.   You might also consider reaching out to private equity firms to see what they are looking for in particular from future hires so that you can ensure you are well-prepared for your career.

5) Finding a Private Equity Position:  Upon graduation, most top MBA grads have a few offers in hand from firms but you may not have the offers from the private equity firms where you want to work.  In this case, you will need to work your contacts, approach a number of firms, market yourself, and ultimately you might end up having to take a position outside private equity (hopefully still related) and hope to steer yourself back toward the industry over time.  Other graduates work for a smaller private equity shop or take a less suitable position simply to get exposure to the industry and hope to prove themselves along the way toward a better title at a bigger firm.  Once you find a position in private equity, you will likely surpass some of the very junior professionals but your career path is far from over as you will have to earn your way up the ladder at any firm.  Your MBA and past work experience, however, will help you accelerate your advance through the ranks.  At this level, the compensation is highly competitive for private equity professionals and the work experience is challenging, fast-paced, and exciting.

I hope you enjoyed this brief article charting the typical private equity career path.  Please note that this is only a boiled down version of the standard career path.  In almost every Private Equity Radio interview that I conduct, I ask the private equity interviewee how he/she made it into private equity so that others can better understand how to get into this exciting and lucrative field.  Most of the answers involve a few common steps like those highlighted above, but rarely does someone’s career path follow these steps exactly.  Some enter private equity after a successful stint at a top law firm, others join after working for a portfolio company, and many professionals take paths that seem completely unrelated to private equity.  In the end, it’s all about what the person can deliver to the private equity firm.

If you would like to advance your career and receive practical private equity training, you should consider the Certified Private Equity Professional program.

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Private Equity Interview Prep

Private Equity Interview PrepPrivate equity job interviews are notoriously challenging.  While I haven’t heard any questions that are as mind-boggling as Google’s interview exercises, private equity firms certainly put prospective employees through their paces and try to get a sense of how an applicant thinks, processes information and reacts to changing circumstances.  In one of our Private Equity Radio interviews, a private equity professional described the process as highly rigorous and warned applicants to be prepared for a lengthy interview and a strong applicant pool with which you will compete.

The following are some general tips for preparing for the private equity interview so you can feel more comfortable in the interview and impress your interviewer:

  • Know your Record:  You need to know your record and accomplishments very well.  It’s easy to think that you already know everything you’ve accomplished in your professional career because you’re the one who did it.  But you need to be able to clearly and concisely answer questions about your professional history–it’s tougher than you’d think.  Focus on your most impressive and relevant accomplishments and what exactly you contributed in your last position.  Center your answers on real numbers and tangible results rather than intangible accomplishments like “I improved client relations and helped the firm raise additional funds from those clients through consistent communication and attention to the their needs.”  Compare that to “I boosted my clients’ capital commitments to the firm’s investments by 20% over my three year tenure.”  The latter is specific and shows exactly what you did and suggests what you will be able to do for your future employer.
  • Do Your Homework: You also need to do your homework on your potential employer.  Few applicants really become familiar with the firm they are interviewing with, and I think that’s a lost opportunity to show your abilities.  If you have clearly studied your potential employer, it will become evident in the interview and you will likely gain an edge on other applicants.  At my firm, we always look for applicants to have done at least some background on the business.  As a third party marketing firm in the alternative investments space, I can’t tell you how many applicants with strong resumes have disappointed us in the interview by lacking any understanding of our business and even our industry.  You should already know the generalities of your potential employer’s business by the interview and with so many private equity firms embracing websites and greater transparency, you should really be able to know what sectors they invest in, the bios of the management team and other facts that will impress an employer and inform you on the business.
  • Practice: Private equity positions are very sought after and therefore often have a very rigorous interview process.  Many professionals just assume that all interviews are the same and do little to prepare for the interview.  I recommend that you spend many hours practicing for the interview–as many as it takes for you to feel comfortable and confidant.Your practice can be simply reviewing your answers and rehearsing by yourself, or you can enlist a friend, professor, family member or roommate to act as the interviewer.  Be sure to make the practice as realistic as possible so you don’t form bad habits that will carry over to the interview.
  • Do A Lot of Interviews:  Sure, you may have your sights set on one particular private equity firm, but that doesn’t mean you shouldn’t apply to others.  If for no other reason than that it’s great practice so you are confidant for your primary job interview.  You can even call up various private equity firms and request an informational interview just to get comfortable talking with buyout firms.
  • Ask a Lot of Questions: Many professionals in our training program ask us for common interview questions in order to prepare for their next private equity interview.  It is important to be prepared but no one outside of the interviewer honestly can say what will be asked in the interview.   The focus is so often on preparing for questions you may never encounter when I believe your time might be better spent thinking of the questions you know will be asked in the interview: those that you ask your employer.  It is an often overlooked aspect, but asking relevant, thoughtful questions of an employer is a great way to demonstrate your expertise and professional curiosity while letting you guide the interview to topics that you feel comfortable addressing.  Do not try to take over the interview, but when the employer inevitably asks, “Do you have any questions for me?” you should be ready with a few of your own.

 

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California Family Offices

California Family Office Guide

America is home to more family offices than any other country at an estimated 3,000 family offices.   One of our firm’s offices is located on the West Coast so we are very familiar with family offices and wealth managers in California.  California has the highest population of any state and there is a high concentration of wealth throughout California in cities like San Francisco and Los Angeles.Due to the high concentration of wealth among many families and UHNW individuals in California, there are an ever-growing number of family offices opening to service them.
The following free guide to California Family Offices will help you better understand California family offices and provide you with resources to learn more about California family offices.  You should also check out our 100% free book on family offices.

 

Introduction to California

 

California is the largest state in America with more than 10 million people above the second most populated state.  California is also one of the biggest hubs for family offices as it is home to a high number of wealthy families and ultra-high-net-worth individuals.

 

More generally, the United States currently has the largest economy in the world.   In terms of GDP purchasing power parity, as of 2010, the United States ranks number one with $13.86 trillion.  The U.S. has long been known as a business and financial capital.  However, the United States was hit perhaps the hardest by the financial crisis and is still struggling to recover.

 

Why California

 

Besides being a very pleasant area for wealthy individuals to work or retire, California is also an attractive destination for businesses.  With the glamour of celebrity and the beauty of the region, many wealthy families and individuals live in California and family offices have sprung up to serve these clients.  Like New York, California is sure to always be a hub for wealthy families and therefore a top destination for family offices and wealth management firms.

 

Family Offices in California

 

The United States has an estimated 500-1000 single-family offices and around 2500-3000 multi-family offices that manage $300 billion and $750 billion.  Although the highest proportion reside in New York, many family offices are in California to service the high number of wealth individuals and families across the California cities.  

 

California, particularly Los Angeles and Hollywood, is home to many of the wealthiest people in America due to the fact that many celebrities, media personalities, actors and actresses, athletes and musicians reside in the area.  This is one big reason that family offices choose to focus on California and often headquarter in Los Angeles or a nearby city, or at least maintain an office in the region.  

 

Although the financial crisis and subsequent recession have certainly had an impact on even the wealthiest in California, there is still a great demand for family offices in California.  The following is a collection of California family office resources:

 

California Family Office Resources Guide

 

California Family Office Resource #1: Here is a San Francisco Networking Event for Family Offices in San Francisco.

 

California Family Office Resource #2: Here is the FamilyOfficesGroup.com guide to American Family Offices.

 

California Family Office Resource #3:  If you are looking for contact details of family offices in California you may want to

 

consider using a Family Offices Database.  A Family Office Database provides you with the complete contact details for 100’s or sometimes even up to 1,000 global single and multi-family offices within an easy to use Excel spreadsheet format.  Learn more about this by clicking here. 

 

California Family Office Resource #4:  This article outlines the need among families and individuals to have family offices manage their money in the US.   

 

California Family Office Resource #5: Here is a valuable report, titled “US Family Offices: Best Practices in Providing Financial Services to America’s Most Privileged Households.” 

 

California Family Office Resource #6: Here is a formal classification of the family office in America by the Securities and Exchange Commission.  This document makes clear the family office’s exemption from regulation under the Investment Advisers Act.   

 

California Family Office Resource #7:   With the merger of two California-based wealth management firms, Kochis Fitz in San Francisco and Quintile Wealth Management in Los Angeles, one of the largest multi family offices in California emerged: Aspiriant.  Please note this is in no way an endorsement of this California family office but it is a very large family office headquartered in California.

 

California Family Office Resource #8:  This report covers “PwC Family Business Survey 2010/11 2011 US family business survey report: Private company services: PwC Download Choosing your next big bet: A US perspective.”

 

California Family Office Resource #9: This article gives an overview of the family office industry and explains briefly why California is such a popular destination.

 

California Family Office Resource #10:  Here are some California family office job listings.

 

California Family Office Resource #11:  This article talks about how US family offices are trying to take away talent from American hedge funds.  

 

California Family Office Resource #12:  This article is on the same issue and is based on a survey of family offices in the US.  

 

California Family Office Resource #13: Here is a FamilyOfficesGroup.org regional profile of North America Family Offices.

 

California Family Office Resource #14: Be sure to check out FamilyOffices.com for our family office database and our free book on family offices.
California Family Office Resource #15: We have put together a guide to Los Angeles Family Offices that you can peruse here.
Are you an employee or manager of a family office in California?  Then we’d like to keep in touch with you.  Simply send us an email at Richard@RichardWilsonCapital.com

Related Resources
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John Lanier Interview

Mr. Lanier has over 30 years of experience advising, leading, and investing in middle-market, entrepreneurially-focused businesses. His early career with Bank of America involved small business working capital financing, which evolved into private equity portfolio company support services with GE Capital. Core to his responsibilities was pioneering the Access GE program. Mr. Lanier is certified in process reengineering, change management and Six Sigma (Master Black Belt), and is an operations efficiency expert. In 2002, Mr. Lanier became KRG Capital Partners’ Chief Quality Officer, and developed the firm’s first generation operational support toolbox. In 2006, he formed Middle Market Methods, to offer strategic planning, process improvement, acquisition integration and change management support to private equity portfolio companies.

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Lee Duran and Daniel Shea

Our guest for this Private Equity Radio interview is Daniel Shea & Lee Duran. Daniel Shea is Managing Director and Head of Private Equity Coverage for BDO Capital Advisors, LLC. Mr. Shea has over twenty years of experience providing transaction and valuation advice to public and private companies as well as private equity firms. He has worked in a variety of industries including energy, automotive, e-commerce, food, health and wellness, aerospace and defense, transportation, electronics, computer hardware, media, and retail. Lee Duran, Partner at BDO USA, a financial professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies.

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Acing the Private Equity Interview

Private Equity TV Episode: Acing the Private Equity Interview

In this Private Equity TV Episode, you will hear some tips on how to ace a private equity interview. In some ways, an interview at a private equity firm is similar to any other financial job interview. But there are many ways that the private equity interview and hiring process are unique such as the experience requirements, typical interview questions, expected background and more. Click here to return to Private Equity TV.

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Private Equity Fund Investment Stages

In this Private Equity TV Episode, we take a look at the different stages of private equity investing from the initial capital raise for the private equity fund to the harvesting of profits from successful buyouts and the increased profitability of those portfolio companies.

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Tags: private equity TV, private equity videos, private equity investments, private equity fund investments, private equity funds, private equity fund investment, private equity investors, private equity fund structure, private equity fund process, private equity investment process, private equity structure, private equity investment stages

Venture Capital Introduction Video

In this Private Equity TV Episode, we look at venture capital, an important part of private equity and how venture capital is different from the large-scale leveraged buyouts typically associated with private equity.

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Tags: private equity and venture capital, private equity venture capital, venture capital definition, private equity and venture capital differences, private equity vs venture capital, venture capital explanation, VC, private equity venture capital definition, private equity buyouts vs venture capital

Private Equity Compensation Structure

In this Private Equity TV Episode, we look at private equity compensation. This issue is a very important one to those working in private equity or those considering transitioning into a career in private equity. Private equity jobs pay extremely well compared to many other careers, but the industry is highly competitive and requires a lot of long nights. Carried interest is a key component of private equity compensation and factors into how the fund calculates profits and distributes them among the employees.

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Tags: private equity, private equity compensation, private equity compensation survey, private equity compensation structure, private equity compensation video, private equity video, private equity TV, private equity salary, private equity money, private equity pay structure, private equity bonus, private equity carried interest

The History of Private Equity

In this Private Equity TV Episode, we cover the history of private equity from the early days of the industry to its current role in finance and corporate activity. Today, private equity is a dominant force in the financial world controlling trillions of dollars worth of assets and investing money on behalf of most major institutional investors from calPERS to sovereign wealth funds.

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Tags: private equity, private equity history, history of private equity, what is private equity, private equity story, private equity videos, free private equity videos, private equity industry history, origins of private equity, when did private equity start, private equity first fund, private equity background

Private Equity Carried Interest Basics

In this Private Equity TV Episode, we cover the very basics of carried interest, what is carried interest, how is carried interest taxed, and more. This is a hot topic in private equity with a lot of debate over how this compensation is taxed so it’s important to know at least the essentials of carried interest.

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Tags: private equity video, private equity insights, private equity carried interest, what is carried interest, private equity capital gains, private equity compensation, private equity taxes, private equity taxation.

Susan Hagerty

Our featured guest for this interview is Susan Hagerty Le May, founder and chairman of International Alliance Associates, a private equity placement agent and cross-border strategic advisory firm. As Chairman of International Alliance Associates, she oversees market research, manager searches and due diligence. She plays a pivotal role in the investment selection process and determining the firm’s overall strategy. She also oversees investor relations and back office functions. We hope you enjoy this interview with Susan Hagerty Le May.

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Tags: private equity, private equity interviews, private equity radio, private equity assets, private equity career interview, private equity fundamentals, venture capital interview, private equity real estate interview, real estate interview

Timothy Golon

Our guest for this interview is Timothy Golon, a Private Equity consultant with about 20 years of experience in the financial services industry (specific to alternative investments). Timothy also serves on the advisory board for the Certified Private Equity Professional (CPEP) training program. He has worked in many areas of alternative investments and financial services including: legal documents, structures, valuations, due diligence, liquidations, tax issues, all accounting aspects, IT and software related issues, infrastructure, investor relations, management company, sales, implementations and many other ad hoc issues. This discussion centers on the Institutional Limited Partnership Association (ILPA), IT solutions for private equity, investor terms and other current issues impacting private equity.

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Tags: private equity, private equity interviews, private equity radio, private equity assets, private equity career interview, private equity fundamentals, venture capital interview, private equity real estate interview, real estate interview

Metin Piskinoglu

Our featured guest is Metin Piskinoglu, managing partner of MP Financial Consulting. Metin is based in Turkey and has worked with private equity firms and investment houses through his boutique consulting firm and in his previous experiences as a CFO on the execution side of M&A business. In addition to his work consulting with mid-to-large sized companies, Metin finds time to blog for the Turkish Harvard Business Review on the web. I hope you enjoy this interview on Turkey’s private equity industry and prospects in the region for buyout firms.

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Tags: private equity, private equity interviews, private equity radio, private equity assets, private equity career interview, private equity fundamentals, venture capital interview, private equity real estate interview, real estate interview

Brad Fisher

In this Private Equity Radio interview, we spoke with Brad Fisher of Featherstone Holdings. Brad talks on his wealth management and private equity career, investing in private equity and private equity direct investing.

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Tags: private equity interview, private equity career, private equity interviews, private equity wealth management, private equity investing, private equity direct investing, direct investing in private equity, private equity investments, private equity audio, private equity radio

Mat Khokhar

In this Private Equity Radio interview, we speak with a private equity professional, Mat Khokhar on his career in private equity, how others can pursue a career in private equity as well as what they can expect from working in private equity.

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Tags: private equity interview, private equity career, private equity interviews, private equity careers, private equity audio, private equity radio, private equity radio interview, private equity professional interview, private equity jobs, private equity career training, private equity investor interview, private equity investors

Private Equity Real Estate Interview

In this Private Equity Radio, we speak with an experienced private equity and real estate professional to discuss his career, what makes a successful private equity fund, characteristics and requirements of a private equity professional, advancing your private equity career, and more.

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Tags: private equity, private equity interviews, private equity radio, private equity assets, private equity career interview, private equity fundamentals, venture capital interview, private equity real estate interview, real estate interview

Antonios Kypreos

In this Private Equity Radio interview, we spoke with Antonios Kypreos, a private equity investor and industry professional about his career, day-to-day responsibilities and activities, and more.

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Tags: private equity interview, private equity career, private equity interviews, private equity careers, private equity audio, private equity radio, private equity radio interview, private equity professional interview, private equity jobs, private equity career training, private equity

Massimiliano Bruno

In this private equity interview, we spoke with Massimiliano Bruno, a finance professional working in Italy. We discussed a number of topics, such as the private equity interview process, how to start a career in private equity and the differences of working for international buyout firms versus US-based private equity firms.

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Tags: private equity career, private equity careers, private equity interview, private equity cpep, private equity training, private equity interview process, private equity interview questions, private equity resume, private equity career training, private equity jobs, private equity job interview

John Loudon & Byron Holley

Private Equity Radio Interview: John Loudon and Byron Holley of Silverstone Capital Partners

In this Private Equity Radio interview, we speak with two executives at a private equity/investment banking firm on various aspects of private equity from deal-making to working in the industry. John Loudon and Byron Holley of Silverstone Capital Partners discuss their firm, how they have evolved in the industry and what it takes to work in private equity.

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Tags: private equity, private equity interviews, private equity radio, private equity assets, private equity career interview, private equity fundamentals, venture capital interview, private equity real estate interview, real estate interview, audio interview, executives, expert interviews