The Backgrounds of 41 recent Analysts at the Top 5 Private Equity Funds

This post is the first in a series approaching the topic of breaking into the Private Equity industry. Articles will cover the most important elements: necessary profile, what particular funds or roles require, and interviewing. This article focuses on recent Analysts at the top 5 PE funds.

We looked at the backgrounds and experiences of 41 Private Equity Analysts at the top 5 PE Funds and were able to make some convincing conclusions about what could be considered an ‘industry standard’.

Previous Industry

The industry of previous experience (full-time roles or internships) of the 41 Analysts we looked at. Note: many worked in more than one industry; all are noted.

Investment Banking

90% of the 41 analysts had an ‘IBD’ or ‘Investment Banking Division’ background. This was categorised as anything that would traditionally be in the IBD of an investment bank. This could be M&A, leveraged finance, equity or debt capital markets, or restructuring , but the vast majority had worked in M&A. This route into Private Equity is pretty much a necessity, due to the fact that IBD experience means by default that you have strong financial modelling skills that have been applied to some of the biggest recent deals.

Consulting

17% had consulting experience, but all the ‘ex-consultants’ had also worked in IBD meaning once again that the modelling skills were there. The advantage that consulting adds to these Analysts’ profiles is that they gain a deeper understanding of business and strategy than may traditionally be developed through a pure IBD background.

Previous Companies — full time & internships

Cumulative list of all previous companies of the analysts for Full-time roles and Internships.

Bulge Bracket

The most common previous companies are the bulge bracket investment banks, and in almost all cases, their M&A teams. Goldman Sachs is the top contender, most likely due to its position as the top Investment Bank by M&A market share in 2016.

So…

Concluding the above, the most common way that recent PE Analysts broke into the industry was through Investment Banking experience at a top 5 investment bank. Many had worked at more than 1 and had also spent time in another industry such as Consulting, or another area of an Investment Bank.

Article by Jack Rizvi