Today we are talking to an analyst from an international PE company based in London.

When recruiting for your private equity company, what are the hardest interview questions you ask candidates, and what are looking for in their answers?

For a well-prepared applicant most questions should be quite straightforward. As most people who apply to private equity jobs already have experience in investment banking, consultancy or transaction services, the interviewer mainly looks how well the applicant would fit in the organization and the company’s investment philosophy. We always ask what the applicant would do if we gave him €50 million.

Despite being categorized as a standard finance interview question, a lot of applicants fail to recognize that this question not only tests commercial awareness, but also the fit with the investment philosophy and criteria the firm operates in. For example, when applying with a large LBO-fund, you may want to look for a public company with large recurring cash flows to cover the debt schedule. But when applying with a smaller fund, you may want to look, for example, how the latest technology can disrupt an industry and how that PE fund can provide growth capital.

For candidates applying for internships or analyst positions at a PE firm, what would be the most important things to avoid on their CVs?

Private equity investing requires long-term commitment and devotion. As such, it can actually be better perceived to mention one company or experience where you were committed to actually make a difference and achieve results, than to show a 2-paged resume with dozens of internships at different places.

How would you describe your typical day?

This really depends on the stage we are in of the investment process. We can be doing research on some investment opportunities, or financial analysis and valuations, attend meetings with management or follow up on our portfolio companies.

How important is networking to getting an internship or analyst post at a PE firm? Can you provide some examples of successful networking techniques you have come across in your career?

One of the keys to successful networking, is to build relationships for the long term. This is even more important in private equity, and specifically regarding job applications, as these are scarce. If you are convinced a career in PE is for you, start to build your network early and make sure your name is on the list when a PE firm is looking for someone to fill a position.

MBA or CFA for a career at a PE firm?

Both programs will give you a strong edge as a private equity analyst, however if you want to be a successful active PE investor, I am convinced an MBA will give you a better skill set. It will help you to understand different business models and how these are changing. It will help you understand strategy, operational effectiveness, and other important aspects of business. It will help you to work more closely with management. In the end of the day, a PE investor makes money buy building businesses.