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Entering Private Equity from Strategy consulting

Private Equity
New answer on May 27, 2024
8 Answers
148 Views
Anonymous A asked on May 22, 2024

Hello everyone,

I would like to ask a question about a career move. 

Do you think I am qualified enough to enter PE, focusing on infrastructure investments?

I currently work as a strategy consultant, part of a global engineering consulting house. I focus mainly on CDD for PE and funds, mostly on renewable energy assets. I do not have a degree in finance, however, I have been acquiring basic finance knoweldge. We don't develop Financial models, but transfer sheets to the clients (sometimes I have done some basic models as well)

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Gaurav
Expert
Content Creator
replied on May 22, 2024
#1 MBB Coach(Placed 750+ in MBBs & 1250+ in Tier2)| The Only 360 coach(Ex-McKinsey + Certified Coach + Active recruiter)

Your experience in due diligence for renewable energy assets with a global engineering firm is like gold for PE firms looking at infrastructure investments.

Here's the thing: PE firms love consultants. You guys are problem-solving machines, can analyze the heck out of anything, and know how to navigate complex situations – perfect for the PE world. Plus, you already have a head start understanding the infrastructure sector, which is a huge bonus for them.

Now, there are a couple of things to keep in mind. PE folks rely heavily on financial modeling, something you might not have done extensively in your current role. Don't worry, it's learnable! There are tons of online courses on platforms like Coursera or Udemy specifically for financial modeling in PE. You can even check with your firm if they offer any training programs.

Networking is your secret weapon here. Get out there, attend industry events, connect with PE professionals on LinkedIn, leverage your existing network for introductions. The more people you know in PE, especially those focused on infrastructure, the better.

Here's the kicker: you might not have a finance degree, but that doesn't automatically disqualify you. Highlight your achievements in consulting! Did your due diligence uncover hidden risks or opportunities that swayed the PE firm's decision? Quantify your impact – that stuff gets noticed.

So, to answer your question – absolutely, you're qualified! With a little effort on financial modeling and networking, you'll be well on your way to rocking the PE world, especially focusing on infrastructure investments. They'll be lucky to have you!

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andrea on May 27, 2024

Hi Gaurav, Thanks a lot, that is extremely helpful! Very good piece of advice.

andrea on May 27, 2024

Regarding the courses to gain finance skills, do you think that the certificate that is released post-course matters to the eye of PE/infra recruiters? Or is gaining knowledge and practise in finance the main purpose?

Alberto
Expert
replied on May 22, 2024
First 30min for free! Ex-McKinsey (4+yrs) | Wharton MBA (GMAT 750) | MBB business case preparation

Hi! 

From my experience, having a finance background (in terms of academics and work experience) is definitely important when applying for PE infra. I would also say that PE funds doing infra are a bit more technical vs. normal PE funds (given the lower business risk of target companies, higher leverage, etc.). You will find most of the investment team coming from IB M&A, but also Leveraged Finance and Project Finance.

On the positive side, renewables is one of the “hottest” sectors within infra, thus having specific knowledge on the sector can be a strong asset when recruiting.

When applying I would suggest you to i) target renewable-focused PE infra funds (where you can best leverage your experience), ii) study hard the for the financial part of the interview (they will get technical).

I hope this helps!

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Hagen
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updated an answer on May 23, 2024
#1 Bain coach | >95% success rate | interviewer for 8+ years | mentor and coach for 7+ years

Hi there,

I would be happy to share my thoughts on your question:

  • First of all, your experience with CDDs, especially in the renewable energy sector, is a great asset just from the limited information you have provided. Your sector-specific consulting experience can be highly valued in the PE industry, especially for infrastructure investments.
  • Moreover, networking within the industry can significantly improve your chances to transition. Socialize with professionals in the PE sector, attend industry conferences, and possibly seek out a mentor within PE to gain insight and advice for a more effective transition.

If you would like a more detailed discussion on your specific situation, please don't hesitate to contact me directly.

Best,

Hagen

(edited)

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Francesco
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replied on May 23, 2024
#1 Coach for Sessions (4.500+) | 1.500+ 5-Star Reviews | Proven Success (➡ interviewoffers.com) | Ex BCG | 10Y+ Coaching

Hi there,

Q: Do you think I am qualified enough to enter PE, focusing on infrastructure investments?

Without having a look at your full profile it is difficult to comment. 

In general, PE is very competitive. You can get an idea if your firm might lead to PE as follows:

  1. Go to LinkedIn
  2. Look for alumni of your company. If your company is too small, you can add competitors as well
  3. Check how many moved to PE in your target region
  4. Adjust for the size of the current employer to find the percentage
  5. If you are considering other options (eg an MBA): repeat for the alternatives, to see if they lead to a better ratio

This should give you an idea of the likelihood of the transition, or at least, the common career path to get to PE for people with a background similar to yours.

Good luck!

Francesco

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Florian
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Content Creator
replied on May 23, 2024
1300 5-star reviews across platforms | 500+ offers | Highest-rated case book on Amazon | Uni lecturer in US, Asia, EU

Hi there,

I believe it's a borderline case where networking can make all the difference. Essentially you have to focus on two stages here:

  1. Network extensively to collect more information and capture some referrals. This is what gets your foot into the door.
  2. Prepare for the financial part of the interview as it will be technical. Consider taking some prep courses. This is what gets you the offer.

All the best,

Florian

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Agrim
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Content Creator
replied on May 27, 2024
BCG Dubai Project Leader | Learn to think like a Consultant | Free personalised prep plan | 6+ years in Consulting

Your CDD experience should be useful for your transition. However, knowing the choosiness that PE firms exhibit - you should definitely want to develop some financial skills on the side. Financial modeling is an important skill to have for PE.

For short-term targets - you might want to engage in online certifications/micro-degrees on the topic. For medium-term targets, there are other online-degrees available that can give you the credentials.

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Anonymous A on May 27, 2024

Hi Agrim, thanks a lot, that is extremely helpful. On the short-term training, do you maybe have some good advice? Does the type of institution that releases the certificate matter, or is learning finance skills the actual purpose, no matter the institution?

Pedro
Expert
replied on May 24, 2024
Bain | Roland Berger | EY-Parthenon | Mentoring Approach | 30% off first 10 sessions in May| Market Sizing | DARDEN MBA

It's really about showing the combination of being able to thing about the market in a strategic way / business perspective, and being able to translate that into the financials and understanding what are the financial value drivers.

While networking can help you out, having some good finance training would strongly support your case.

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Cristian
Expert
Content Creator
replied on May 23, 2024
#1 rated MBB & McKinsey Coach

It's not impossible, but it's also hard to tell with how much I know about you at this point. 

My recommendation is to do 2 things

1. Test it. Speak with 5 recruiters from PE firms and see if your profile is relevant for them, and if not, ask them what's missing. Then you at least have clarity over your situation. 

2. Aim to develop the sort of skills PEs look for in your current job. That will then make you a more attractive candidate.

Best,
Cristian

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Gaurav gave the best answer

Gaurav

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