How to beat the axe in Asian private equity firms
Despite the rise of the fintech sector in Singapore and Hong Kong, most investment bankers I speak to still say private equity (PE) is their number one choice if they want to leave investment banking division (IBD).
PE is perceived as prestigious in Asia, while at the same time many global banks have been facing challenges in the region. The PE industry also briefly faced competition for talent from the upstart venture capital (VC) industry in Asia. However, when speaking to job seekers recently, I’ve noticed that this battle has been decisively won by PE, at least for now.
This means, however, that the competition for PE jobs in Asia is fiercer than ever, with candidates from all walks of investment banking vying to impress PE firms with their M&A expertise and various other skills – from sector experience to foreign languages.
As a result, up to 80% of PE interviewees get eliminated in the first interview round, and only about 5% to 10% remain for the final round.
If you are invited for an interview, here’s how you can increase the odds of success in a hyper-competitive market.
Get the timing right
Allow yourself enough time to prepare for the interview. If the firm wants to schedule it within 48 hours, you may want to push back – ideally, you want at least three days (preferably including the weekend) to get ready. Once the interview date is set, I’m observing funds increasingly putting candidates through gruelling three or four-hour sessions to test both their skills and stamina. The safest bet is to take a half day or full day off for the interview – you are far more likely to be rested, relaxed and better prepared. If at all possible, obtain the names and backgrounds of the whole team just in case someone new gets pulled into the interview session unexpectedly.
Detail your deals
When preparing for your interview, remember that any deal or project on your CV is fair game for (very) in-depth questioning. Most bankers I’ve dealt with wrongly assume they can recollect all the relevant parts of all their deals. But the PE interviewer is looking for higher-level details more than what can be found via a Google search. They want to hear about your personal contribution to the deal, what challenges you faced and how you displayed lateral thinking to resolve them and to take the transaction closer to completion. They want you to show real-life deal-execution experience and an understanding of M&A dynamics.
The next stage is to prepare yourself for questions about your fundamental technical skills. PE deal teams in Asia are lean, so regardless of whether you are going for an analyst, associate or VP role, you will at some point need to delve into the bowels of a byzantine financial model. Most likely you will need to sit for a four-hour financial modelling test at the firm’s offices. The model will probably be a highly intricate operating model where you need to link up three financial statements and then do a discounted cash-flow valuation. Some firms also test candidates on LBO modelling skills, although this is less common in Asia.
Most candidates view an interview as a Q&A session where they are the ones doing all the answering. This is a mistake that candidates in Asia are particularly prone to. You must be able to guide and generate the flow of conversation in an interview situation such that the interviewer also enjoys the process.
Turning the tables and asking the interviewers well thought out, properly researched and detailed questions is fantastic way to:
- demonstrate that you are a dynamic and proactive candidate
- that you have high standards and are keen to ensure the platform you join is robust and progressive
- that you are highly interested in the job and view the interview process as a genuine chance to find out more
- that you have highly developed interpersonal skills and good emotional intelligence
Win them all over
Make sure you ask your recruiter for the full list of names of the people you will be meeting. If your recruiter is well connected, they will also be able to give you an insight into some of the personalities you are meeting. This can be invaluable. Particularly during an intense four-hour session, different interview styles and personalities need to be handled and managed with dexterity if you are to have any chance of success.
Remember that each interviewer you meet will have a say in the outcome – ‘consensus hiring’ in Asian private equity is virtually a must due to small team sizes. The more you can tailor your pitch to each person, the more likely they will take it as an interesting and positive experience and give you the green light to proceed to the next round.