Relevance of co-investments / secondaries deal experience to private equity
I have just joined a Graduate program at a large asset manager in the UK. So far, it has been four months. I work in the private markets team focused on co-investments and secondaries. I will do two rotations in other businesses and the program ends in Q4 2024. My day to day involves building decks / papers to present to IC for deals in companies. Writing these sometimes includes running a pre-existing model provided by the GP (usually operating and financing models, sometimes includes an LBO). From there, we would work on the model performing sensitivities, repurposing formulas in new tabs, analysing the assumptions, presenting the data in a different outlay for the deck, etc. Building the deck also includes analysing and summarising the key points from the CIM, etc. I have had some deal experience, including three co-investments; one where I ran the model and built the deck myself, and another where I wrote the paper on my own.
Given the above description, though a bit high level, would experience like this be relevant enough when applying for roles in private equity firms?
Based on the most helpful WSO content, the experience you've described is quite relevant when applying for roles in private equity firms. Here's why:
Modeling Skills: You've mentioned running pre-existing models provided by the GP, which includes operating and financing models, and sometimes LBO models. This is directly applicable to PE, as financial modeling is a core skill required in the industry.
Deal Experience: Having worked on three co-investments, with hands-on experience in running models and building decks, demonstrates that you've been actively involved in the investment process. This experience is valuable as PE firms look for candidates who have been exposed to the deal-making process.
Independent Work: Writing a paper on your own shows initiative and the ability to work independently, a trait that is highly regarded in the fast-paced PE environment.
Investment Committee (IC) Interaction: Building decks and papers for presentation to the IC indicates that you understand the importance of communicating investment opportunities effectively, which is crucial for securing buy-in from stakeholders in PE deals.
Due Diligence: Analyzing and summarizing key points from the Confidential Information Memorandum (CIM) is part of the due diligence process, which is a critical component of PE transactions.
Sensitivity Analysis: Performing sensitivities and analyzing assumptions are part of risk assessment in PE, ensuring that potential investments are robust across various scenarios.
Private Markets Exposure: Working within a private markets team gives you a solid foundation in alternative investments, aligning well with the focus of most PE firms.
In summary, your experience in co-investments and secondaries provides a strong foundation for a career in private equity. It demonstrates a blend of technical and analytical skills, deal exposure, and the ability to synthesize complex information—all of which are key competencies in PE. When applying for PE roles, be sure to highlight these experiences and how they've prepared you for a successful career in the industry.
Sources: Differences between Co-invest and Secondaries?, Direct Invest to FoF/Co-Invest?
I’m at a FOF group and quite a few analysts are from similar backgrounds as yourself
It’s significantly harder to goto direct PE but going to a Co/Secondaries group is very much a possibility for you
Thank you. If I was determined to try to get into direct PE, what would be the ways to bridge the gap and maximise my chances?
Your best bet would be to reach out directly and through HHs for LMM opportunities that are newer funds and would be willing to take a chance on your background. But even that would be tough right now given the limited number of opportunities and larger number of people with more applicable backgrounds looking for roles.
The biggest roadblock you’ll run into is your perceived lack of technical skills relative to bankers or consultants. Traditional candidates will also have a better knowledge of the entire m&a process. PE firms expect analysts and associates to have this knowledge from day one.
Secondaries is not at all transferable to PE. Your investing in different types of assets than what direct PE does
If I were you, I would try to work more on co-investments, as much as possible. Then lateral to another firm that does both direct and co-investments; these are different groups at the same firm sometimes.
Start recruiting for IB
Bump
This should work perfectly fine. Of course, top MFs will probably not work but anything else is possible (depending on the rest of your profile). Keep in mind that your CV highlights the relevant deal stuff.
I had the same background and got interviews and offers across LMM and UMM funds.
Can I PM you?
Were you an analyst and moved to associate 1 roles?
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