How to break into private equity when you come from a non-target school?
Breaking into the private equity industry can be challenging, especially for those who did not attend a top business school. However, the sector has become more accessible over the years due to an increase in liquidity and emerging players. Historical funds have also increased their staffing levels by recruiting more analysts. Despite this, competition remains tough, and candidates from non-target schools may face additional obstacles. In this article, we will provide advice on how to break into the private equity industry without having attended a “target” school.
Get to the root of the problem and strengthen your academic background
If your academic background is holding you back, you may want to consider an MSc degree in a target school. These programs are open to students from non-target schools and can help you strengthen your theoretical knowledge in finance and take advantage of the school’s network and reputation. However, these programs can be costly (generally between €15,000 and €25,000) and time-consuming.
If you’re not interested in pursuing a Master’s degree, you can consider obtaining a certification like the CFA. You can earn this certification while studying or working full-time. While neither of these options guarantees that you will land your dream job, they are less expensive and time-consuming alternatives.
Build and leverage your network
Building and leveraging your network can be a powerful tool in the private equity industry. Since job openings in this field may not always be publicly advertised, having a strong network can give you an edge in finding opportunities. Engaging in conversations and building relationships with PE investors can demonstrate your motivation and help you stand out from other candidates.
We already talked about networking in our previous article: How to find a job in private equity?
Rely on internships to make a difference
Having at least one internship experience in Private Equity is almost essential. It provides an opportunity to validate your professional goals and gain valuable skills and experience. The timing of the internship is also important. It may be a good idea to do it at the end of your studies with an investment fund that frequently hires recent graduates. This will give you six months to demonstrate your abilities and persuade your team to offer you a permanent position.
Adapt your research
While larger Private Equity firms may only consider applicants from top investment banks and prestigious schools, smaller firms tend to be more open to hiring candidates from non-target schools.
Thus, candidates can consider applying to small cap and regional funds. They often provide similar opportunities to those offered by larger firms. In fact, working at a smaller fund may offer more exposure and responsibility. You may participate in meetings with company management or take on more independent projects. Many recent graduates opt for regional funds and smaller Private Equity firms for this reason.
Consider gaining more experience before applying for a position in Private Equity
While a strong academic background is still important to Private Equity recruiters, gaining professional experience can help students from “non-target” schools stand out. Working in areas such as Transaction Services, M&A, or Leveraged Finance for 2 to 4 years can provide a valuable springboard to a job in private equity. These roles will enable you to develop technical skills in financial modeling. They allow gaining exposure to numerous transactions, sometimes even alongside investment funds.
The financial skills required for M&A, Transaction Services, and Private Equity are similar, making it easier to transition to a PE position. Furthermore, investment banks and advisory firms have a more hierarchical structure, with dense analyst pools that are well-suited for starting a career in finance. These roles also provide training, support, and follow-up, which can be lacking in smaller PE funds.
Conclusion
To increase their chances of securing a job in private equity, students from “non-target” schools can consider various options.
- One such option is to invest time and money in further education. Although this time-consuming path does not guarantee a job opportunity, it adds value to the education section of their resume.
- Students should be aware that it can be difficult to secure a job in Private Equity without an HEC degree. But they may want to explore other options. Gaining experience through internships and early professional experience can be beneficial. They can also build a strong network and explore regional funds that may have different recruitment practices.
It is important to note that even with a strong resume, candidates will need to succeed in interviews and modeling cases. To prepare for all these steps and succeed in joining an investment fund, we invite you to consult the content of our training course for successful interviews in Private Equity.