Why a career in private equity?

[Andy Nguyen]

From M&I, a website for aspiring investment bankers.
They have plenty of interesting articles and resources on the website on how to get into Wall Street

Given private equity is something some people here have asked about in the past, here is one article Brian post today

http://www.mergersandinquisitions.com/why-private-equity/

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’s a good thread on WallStreetOasis where several guys in PE contributed some thoughts on what it’s really like and how misinformed you are.

The short version: 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.

 

[euroazn]

Saw botht the WSO and M&I article. One question though: what's the relevance? I can't imagine a quant career in PE :S

 

[Andy Nguyen]

That doesn't mean one should not try to broaden his knowledge of the finance industry. How should it hurt?

 

[euroazn]

Oh, it won't at all! I was just curious =3 (thought that perhaps there _are_ quants in PE)

 

[goldski]

There are quants in PE. Not heavy quants, but quantitative skills are required for some jobs. I had an internship offer from one of the firms mentioned above. PE is "sexy".
I chose to goto a trading desk at a bank instead. I love PE offices. The chrome outline on the mahogany wooden interiors. wow

 

[Anthony DeAngelis]

Quants work all over. I think getting a flavor of the whole industry is nice. I work in PE and greatly enjoy the atmosphere and work aspects. I would say being able to think outside the box is key. Thanks for posting Andy!

 

[bluechimp]

You guys would be surprised. There are convergence trends between traditional IBD roles and quants. Among others, I think Citi's Financial Strategies Group and J.P. Morgan's Capital Structure Advisory Services can be quite academic/technical. Check out the following job description, courtesy of my old mates at GS:

OVERVIEW
IBD Strats collaborate with capital markets professionals and investment bankers to create sales analytics and structured solutions for our clients. We perform a number of functions, including: (a) helping corporations and financial institutions optimize their capital structures across a range of products, and assess various M&A alternatives in a quantitative framework; (b) designing equity, interest rate, foreign exchange, and credit derivatives to help entities meet tactical and strategic risk-management objectives; (c) pricing and risk-managing the funding commitments made by the firm to corporate clients; (d) expanding the development of the firm's proprietary codebase from which all the above analytics are deployed.

We are looking to hire at the summer analyst level in New York:

• Corporate Strats (capital structure and M&A advisory work for corporate clients) for a number of our sub-groups:
• Financial Institutions Group (FIG) Strats: (balance sheet risk analyses of financial institutions including banks and insurance companies; structuring, pricing and hedging of exotic equity derivatives and FX/rate derivatives for both asset and liability side risks; asset portfolio optimizations and restructurings)
• Structured Equity Strats (structuring, pricing, and hedging of equity issuance and repurchase derivatives and hybrid securities)
• Debt Capital Markets Strats (structuring, pricing, and hedging of loans and other credit products)