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Can You Break Into Private Equity from Undergrad?

Can You Break Into Private Equity from Undergrad?

June 12, 2024

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Can You Break Into Private Equity (PE) from Undergrad?

Building on last week’s newsletter, today we’re covering the skills you’ll learn in a private equity internship and how to leverage that experience to land any full-time finance role. Plus, you get to hear how Derek, one of our coaches, landed his first private equity internship through his love of Chipotle burritos and playing poker with friends.

Paths to Private Equity

As we discussed in last week’s newsletter there are two main paths to breaking into private equity:

Investment banking ➡️ private equity: Complete a 2-3 year stint in investment banking before moving to private equity (most common).
Direct Entry: Skip IB entirely and interview directly for a private equity analyst program (less common).

Derek’s Direct Entry Experience

During our “Intro to Private Equity” session this past Sunday, Derek shared his journey landing a private equity analyst role straight out of Wharton, emphasizing the importance of early networking, targeted preparation, and how bonding over poker and Chipotle led to his first internship. If you missed the session or want to rewatch it, check out the video below:

🔑 Takeaways From Our Intro to Private Equity Event: Why Students Fail to Land The Job

Lack of a genuine answer to “Tell me about yourself”: Many just walk through their resume without a compelling story
Weak resume structure: Poor formatting, unclear experiences, and lack of relevant extracurriculars/interests
Limited finance understanding: Confusing fundamental concepts like M&A with stock-picking
Failing the “Airport Test”: Struggling in networking calls and interviews to be someone others would enjoy talking to
Not Following The Dress Code

Derek has helped 25+ students land top Private Equity and Investment Banking jobs. Want to learn how Derek can help you?

Emerging Trends in Private Equity Hiring

Private Equity firms are increasingly hiring analysts directly from undergrad, moving away from the traditional path of recruiting bankers with 2-3 years of experience. Believe it or not, many PE firms are now offering undergraduate internships. Here’s what you need to know:

Private Equity Internship Expectations

Landing a PE internship is a fantastic achievement. While competitive and sometimes not leading to full-time offers as frequently as investment banking or management consulting, these internships are a golden opportunity for finance students.

A PE internship provides an awesome (and well-paid!) summer experience that can significantly enhance your resume and help you secure a full-time position in private equity, investment banking, or other investing roles.

What Is My Role as an Intern?

As a private equity intern, you’ll gain exposure to a wide array of responsibilities:

💻️ Skill Development: Master Excel, PowerPoint, industry and customer research, risk assessment, financial analysis, LBO modeling, debt financing, and portfolio company management. These are the foundational skills that will set you up for every finance career.

🎯 Portfolio Company Improvement: Assist in evaluating and implementing growth initiatives at the firm’s portfolio companies.

Example: Develop a new marketing strategy for a behavioral health portfolio company to drive customer and revenue growth.

🔎 Investment Opportunity Evaluation: Conduct strategic and financial due diligence on new acquisition opportunities.

Example: Dig into the financials and operational files of a Generative AI company your firm is considering acquiring.

🤝 Live Deal Participation: Work on multiple live deals which exposes you to the mergers & acquisition process and how investors think about approaching deals.

✈️ Travel: Travel to client sites for due diligence on live deals and/or portfolio company meetings (fingers crossed you get a warm-weather location by the beach 🏖️)

Does Having a Private Equity Internship Put Me at a Disadvantage If It Doesn’t Convert to Full-Time?

Even if a PE internship doesn’t convert to a full-time offer, it’s still HUGELY valuable. Interning with a PE shop helps you develop critical hard and soft skills and exposes you to the world of M&A—experience that’s invaluable when you're gunning for any other finance-related full-time job (IB, Management Consulting, etc).

So, How Do I Land a PE Job Out of Undergrad?

The million-dollar question! Landing a role in Private Equity might seem daunting, but with the right approach, it's entirely achievable. Start by honing your financial skills, networking like there's no tomorrow, and crafting a compelling story that sets you apart from the crowd.

Seek guidance from industry experts, like StepStone’s PE coaches, to maximize your chances. And please, don't let your resume fall into the black hole of ATS rejection due to poor formatting. Make sure it's formatted to pass through the ATS, so it lands in front of human eyes, where it belongs. Book a free consultation with the StepStone team to explore how we can help you land your dream job.

Workshop spotlight

With consulting interviews just around the corner, it's time to level up your game! Join Naoya, a seasoned McKinsey consultant, on Sunday, July 14th, for an exclusive workshop designed to help you ace your consulting interviews. As a mentor and the founder of Cornell University’s Career Advising Program, Naoya has taught 100+ students how to excel in case interviews.