| Topic Name: |
I-Banks prep VC's |
| Message Name: |
thanks for your insight! |
| Date Posted: |
04/15/2005 |
| In Reply To: |
I'm not as familiar with the infrastructure space, but I can provide some general insight. What I've found is most PE firms are looking for the following things: 1) LBO modeling ability and understanding capital structure (i.e. risk/return profiles of different security classes - Revolver, TA, TB, High Yield, Sr Sub, Convertible, Preferred, Common); 2) deal experience including a very good understanding of the diligence process and its pitfalls); 3) critical thinking ablitity - SWOT analysis and investment appeal on a prior deal or industry with which you've had experience; and 4) general fit with the team and communications skills. In terms of infrastructure, if you can explain your modeling experience and investment rationale for the deals that you've closed, then I think that would make you marketable to other late stage PE firms. However, it will be somewhat less marketable than traditional LBO experience mostly because your investment criteria is somewhat different. Correct me if I'm wrong, but you are not as concerned with evaluating/backing a management team and do not deal with companies operate in competitive environments. That being said, I think this can be overcome during the interview.
However, if you do not have principal investing experience (i.e. buyside) prior to your mba, forget about applying to a PE firm post-mba, regardless of your credentials. There are simply too many candidates that have already done IB/mgmt consulting and then PE that you are competing against for relatively few positions. This phenomenon is something that has evolved over the last 2-3 years, but is becoming the norm. Finally, where you get your mba is equally important. Just look at the number of bios with HBS/Stanford/Wharton on any PE firm's website and that should tell you alot about the qualifications for a US PE firm. Hope this is helpful. |
| Message: |
dialing4dollars... i really appreciated it. it is hard to gauge what the experience will be like. i enjoy it thoroughly, but because infrastructure PE is not as common, it is hard to determine what the future opportunities are.
i have not yet had the opportunity for due diligence, but i have had the opportunity to model, etc. (and some of the other things you have mentioned).
there is very little SWOT analysis because often the infrastructure assets are regulated (because of their monopolistic nature), so there is very little competitive threat. In non-monopoly situations, i haven't yet had to perform SWOT analysis. i guess the results would have to be implemented in the model's inputs...hence, you are correct in that many of the assets we look at do not operate in competitive environments.
we do, however, have to evaluate management. it is important especially considering that many of the returns in a regulated environment can depend on management outperforming regulatory assumptions. i assume it would be important to evaluate management in any PE environment, especially if large dollars are involved.
regarding US PE firms, do the top firms in the US recruit from H/S/W? Would a firm like KKR, Bain, TPG, etc. be involved in recruitment here?
as well, as is usually the case when applying for positions out of undergrad, one has an easier chance to land an interview if you have relevant work experience on your resume. is it the same for top PE firms?
that is, for example, how many spots open for a position at KKR every year for the NY office and how many people interview? will 100% of these candidates have PE experience prior to their MBA's?
last question (sorry for the many questions) - during an MBA, would you recommend banking experience during the summer placement if one does not have any banking experience?
thanks again!
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