Private equity–the world of the rich, the world of the brave. How can you become a player? How can you get into one of the investment companies? And how to succeed in the job interview? To be honest, the easiest way (and also the most common one) leads through a personal referral. Someone knows your qualities, they recommend you to the management of the company. You will still have to pass the interview, but you won’t be just another person from the street.
Such an interview is mostly about demonstrating your experience in the field (with the help of your resume and projects you’ve worked on before), and about building a good connection with the decision makers. Of course, you will still face some questions, and we will look at them right now. Later on in an article I also describe some other ways of getting invited for the interviews–if you are still waiting for your invitation for the big day. But let’s have a look at the questions.
Why do you want to work for us, and not for another private equity firm?
You should do your homework. Research about the company, about their recent investments, goals and vision. Find something that resonates with you, and point it out. Praise them for something they do well, and show them that you did not apply for a job with them by a chance, that they happen to be your first choice (even if they are simply the only company that invited you for a face to face interview).
It can be the working environment, the salary structure, employee benefits, their portfolio, successes, or even location of the company–anything that makes them stand out in your eyes.
Tell us about your biggest professional failure.
Failures belong to life of every single investor. Tell them about a bad decision you made, one that cost you a lot of money, or even your reputation, or even your former job.
Your attitude matters the most for the interviewers. Show them that you can admit making a mistake, and that you actually learn from your failures, and that they help you to become better in what you do. Sure enough, something has not panned out the way you wanted in your last occupation. Otherwise you would not be sitting in the room with them today. But you learned your lesson, improved, and now you are ready to move on.
What would motivate you in this job?
Obviously the financial compensation is amazing in this sector. And while I’d not recommend talking about money in most job interviews, I’d recommend that in this one. It is a tough field, and people who are driven by money are typically the people who do well in private equity.
Nevertheless, you can go for another motives, such as your passion for investing, an option to transform existing companies, and other reasons that motivate you to work in the field. You should adjust your answer to the type of job you want to get with them–be it an analyst or an associate…
Where do you see the markets heading? What do you consider the best investment opportunity at the moment?
Try to be bold in your predictions. Do not say what everyone else is saying. Point out certain opportunities you see on the market. Show them that you watch the trends, but think outside of the box. However, you should not talk about instruments that do not really belong to the world of private equity, some extreme speculations or cryptocurrency for example.
Good alternative is also saying that you do not rely on guesses or intuition. You cannot tell where the markets are heading, or how a particular financial instrument will fare in the next months. But you are ready to sit on your ass for hours and do your analysis, trying to find the answers they are looking for.
Here are profiles of three startup companies. Have a look at them and tell us in which company you would invest.
Be aware of the pitfalls. All profiles may report some flaws, and there may be no clear winner. Or, the best answer can be that you wouldn’t invest in any of the companies they presented.
Study the materials carefully, and try to explain your reasons. In private equity it is often hard to tell what a good investment is, since we do not know how things will pan out… Therefor the key is to show them that you can do some analysis, and have your reasons for investing, or for not investing in something. Think out loud, and explain your reasoning. If you manage to do so, there isn’t anything like a bad answer.
Describe a situation when you had to make a difficult decision.
Decisions. Life of an investor is all about making decisions, and a bad one can sometimes cost the company millions of dollars–depending on your playground, and the budget you operate with.
In your answer you should clearly explain the variables you considered before you made the final decision, and you should also ensure the interviewers that you are not afraid of making a decision.
If I gave you one million right now, where would you invest the money?
You have a few options at this point. One of them is going for diversification, saying that you do not like to put all eggs in one basket, and would invest in a variety of stocks/options/commodities/real estate.
Another alternative consists in going for a risk, saying you’d invest in a certain company or stock, trying to maximize the profit. The right answer depends a lot on the philosophy of the private equity firm, the type of investments they prefer, and they risk aversion ratio.
You can also go for an experimental answer, saying that you would invest the money in your education, or just get some good looking girl and travel around the world for a year, trying to understand other cultures, trying to find your purpose. At the end of the day, such a journey is also an investment (and one with an uncertain end).
Why should we hire you, and not one of the other applicants?
Try to list your strengths, talk about the value you can bring to the company. If you have an ace hidden in your sleeve, this is the time to show your cards.
Do you have good connections in the banks? Do you have some insider information? Or perhaps you know something other job candidates do not know? Do you have a special skill? This is the time to reveal it to the hiring managers.
And if there is no special skill, you can either bet on your motivation and readiness to work 80 hours a week for the start, trying to make something happen with your career, or on humility, saying that other candidates also have their qualities, and they will have to figure it out on their own, who the best candidate for the job is.
Other questions you may face in your private equity job interview
- Describe a time when you struggled to communicate something to your boss, colleague, or to a customer. How did you manage to get your message over?
- Describe a situation when you had a conflict with one of your colleagues. How did you solve the conflict?
- Tell us about a time when you felt overwhelmed with work.
- Here is a balance sheet and a cash flow statement of one company, for the last ten years. Have a look at the numbers and tell us your predictions. Would you suggest investing in the company?
- Tell me about your most successful investment experience.
- Have a look at this company, what they achieved in recent years. If we were to invest in them, what strategy would you suggest?
- Where do you see yourself in five years from now?
- If your investment increased by 35% and now you have $350, how much did you begin with?
- Tell me about a time when you had to meet a tight deadline.
- Tell us one think about yourself you wouldn’t want us to know.
Special Tip: If you experience anxiety, or do not feel ready for the questions from my list, have a look at our Interview Success Package. Up to ten sample answers to each tricky interview question (including 31 dreaded scenario-based questions) will help you get ready for this challenging interview, and outclass your competitors–since you will know something they won’t know… Thank you for checking it out!
Final thoughts, next steps
Unless they approach you directly (personal referral, headhunting), it is tough to ace this interview and get a job of your dreams. My short selection of questions should help you to understand what to expect, in terms of personal, behavioral, and technical questions.
But it isn’t only about your answers in the interviews. It is about the connection you manage to build with the members of the interviewing panel, motivation you show in the interviews, willingness to work super hard and sacrifice something for the company, and so on. Keep it on your mind on the big day. They should get an impression that you’ve been eagerly waiting for this interview, and that you are just making your dreams come true… If you manage to make such an impression, you have good chances of making it. I wish you good luck!
May also interest you:
- How to overcome interview nerves – 4 steps guide on overcoming anxiety and showing your very best when it matters the most.
- Salary negotiation tips – Learn how to get as much as you deserve, if not more, at the end of the interviews.
* You can also download some questions in a simple one-page long .PDF document, print it, and practice your interview answers anytime later: