Cracking the Private Equity Interview

Given how competitive the market is these days for securing a job in private equity, preparing to master the private equity interview can be intimidating. Many young professionals place extreme pressure on themselves to perform well in these interviews to land a position at their dream firms, but they often don’t have the tools to alleviate this stress and still succeed. While many people think that the technical questions are more important to focus on for private equity interviews, failing to master some of the most important behavioral questions will have a greater effect on jeopardizing your ability to secure one of these roles. Here are a few key tips and strategies for success in order to decrease your stress and adequately prepare for the important behavioral questions that will come up in private equity interviews.

1. Sell your story

When I was interviewing for my first roles in finance, I was often told by older mentors that your “story” is the most important question to nail in any interview. Since it is usually the first question the interviewer will ask you, either by asking “Tell me about yourself” or “Walk me through your resume and/or experiences,” you can either grab the interviewer’s attention right away by having an engaging answer or lose their interest in you entirely by rambling or not having a compelling story as to why you are interviewing for private equity. Having a great story can set a positive tone for the rest of the interview and leave your interviewer with the feeling that you have the relevant skills for the job and could fit in with the team.

2. Understand the basics of private equity and fund strategy

In crafting your answers for “Why PE” or “Why our firm”, which are the next two most important questions in a private equity interview after the story, you will need to gain a good understanding of the basics of private equity and the strategy of the fund you are interviewing with.

For the “why PE” question, do some reading on what private equity professionals actually do on a day-to-day basis. Does creating presentations, working on financial models, and presenting to an investment committee about potential new investments sound interesting to you, and do you have applicable skills from prior job experiences that you can apply to these responsibilities? If you work in banking, you can use this opportunity to speak to your deal experience and how you’ve run a buyside or sellside process, giving you a better understanding of a junior team member’s role at the private equity firm. You can talk about models you’ve worked on or marketing materials you’ve put together (teaser, CIM, management presentation, etc.). Lastly, you will want to speak about why you want to be an investor since it’s very different from being a banker or advisor. Have you been investing on your own? Do you follow industries or companies that you think would make great investments, and why? Do you like the idea of creating value for companies through portfolio management and taking on a more active role in the company’s growth trajectory? Think about what genuinely applies to you and how you can draw on your experiences.