Getting into private equity is a dream for nearly every finance graduate. Often professionals from consulting want to move to PE as well. What’s concerning about this transition is private equity investors are highly biased towards banking professionals. So let alone consultants.
Though the transition from consulting to private equity is challenging, many consultants manage to do it smoothly. If you’re a management consultant, whether at MBB (McKinsey, BCG, and Bain) looking to embark on private equity careers, here’s how you can do it.
#1 Get recruiters to notice you
One of the major challenges if you’re coming from a non-banking background, is to get recruiters to notice you. Recruiters specifically look for candidates from investment banking and ignore consultants.
Try to get recruiters attention by cold calling, emails, alumni network, or professional network.
Here are a few strategies you can use:
- Ask for advice: When you contact a recruiter or alumni, seek advice on how you can get into a private equity firm, instead of asking if the firm is hiring. People are more responsive towards the former question than latter.
– Do not ignore recruiters: Always aim to meet recruiters in person. It is easy to make your point while talking in person, else recruiters will ignore. Getting referrals from alumni in banking helps. Recruiters tend to ignore leads coming without referrals.
– Demonstrate your strength: Consultants bring a different and unique skillset than traditional investment banking analysts. Highlighting your strength and how it can help the organization flourish work in your favor. Portfolio –focused top private equity firms often hire consultants with a strong focus on operations.
- Prepare for objections: Private equity professionals are expected to have a strong finance background. For candidates coming from a consulting background, this is a common objection among the firms. Prepare to tackle this question in an impressive way and how you will overcome this barrier.
#2 Overcome challenges
Getting foot in the door is the top challenge that consultants face when they are looking to get into private. The following are a few common objections that you PE recruiters raise, so focusing on should prepare to overcome.
1. Can you build financial models?Financial modelling is a high-value skill that is expected from private equity investment professionals. Offer to take sample test or send samples models and let them be the judge of the modelling skills.
2. Do you have deal –making experience?Private equity professionals take deals from conception to culmination, which requires them to have relationship management skills, strong communication skills, and ability to coordinate with business executives. Point out to restructuring, expansion, and M&A deal experience where you had to deal with management teams and get their approval to finalize tasks.
3. Can you work for long hours?PE firms are notorious for having long working hours. Consultants typically have standard working hours. Transitioning to long hours can lead to burn out and mental health problems. Respond to this question by pointing out previous
experiences where you had to put in long hours. Pursuing full-time degrees with a part time job is a good example.
#3 Get a private equity certification
The most common reason people want to move to private equity is money. No doubt private equity jobs are lucrative. What’s more essential for the firms is skills and passion for private equity. A private equity certification demonstrates your passion and willingness to go the extra mile to acquire skills required to work in private equity. A certification is valuable for professionals coming from all backgrounds, but especially valuable for professionals coming from non-traditional backgrounds like consulting.
CPEP (Chartered Private Equity Professional) from the United States Private Equity Council (USPEC) is a high-value credential that demonstrates your finance and other skills required to work successfully in private equity. CFA, CFP, and FRM are equally valuable certifications that smoothen your transition into private equity careers.