CFA & Private Equity.

CFA General
#1

Hi All,

As a CFA Candidate, Analyst forum has been my “to-go” forums to learn anything related to my life pre-CFA and post-CFA. While many times this question has been asked AND answered in many forms here, I fail to match it to the question that is bugging me forever! So here I go with the usual question - CFA & Private Equity.

I graudated couple of months ago with an UG degree in a non-finance field and am obviously (since I am here) looking to give the CFA Level 1 exam this Dec. I know that CFA is not a gold ticket to the world of PE. I also know that most PE firms recruit right out of college or through headhunters. But what I do not know is whether having passed the CFA Level 1 and hopefully the Level 2 examinations, would it help my resume stand out from the bunch that the hiring manager might be looking at? Would it help me get an interview?

Again, there were a couple of postings that the CFA is useless to get into finance. For all such potential answers - “THANK YOU.” I am giving the CFA exam not just because I am obsessed at working for a financial instituation. But, also because I was using the CFA material for the past two years as a guide to understand my own investments in the stock market and I find the subject matter immensely exciting. Hence I thought why not? And since I am anyway giving the exams, they might as well help me get that interview where I can show the passion and gain an entry-level opening into a job that I would actually enjoy doing.

Hopefully the answeres here would help someone else like me and hopefully once I gain enough knowledge about the world of CFA, I can contribute something here.

P.S. For all those who are taking the exam this Jun - Wish you all the luck in the world. Hopefully this time more would pass!

#2

My sense is that the CFA charter is not a huge thing in PE. However, if you haven’t had a finance undergrad degree, L1 does say you know some things about how to value companies and L2 deepens it. L3 is only marginally useful in PE, I’d guess.

PE really likes to recruit out of investment banking, because that’s where people get to practice valuation day-in and day-out in an environment that is about doing deals. There are other places on the buy side where one analyzes companies and then decides to pull the trigger or not, but usually those places are usually a career distination, not a career stopover on the way to something else.

#3

Thanks bchadwick… Guess I’m back to the drawing board then… I have had an unpaid internship in PE in my Junior year… Although that didn’t turn out to be a full time job, it still remained the only job I’ve actually had fun staying late lol!!! So, I’m trying to wiggle into that forever now!

Any suggestions!!! My fallback plan was to try to get into sell-side analyst roles in some firms like Piper Jaffery, then get an MBA and get into PE (That is, if I still stick to loving it)… Might not be a solid plan, but I heard CFA does help in getting into sell side research. Please correct me if I am wrong.

Thanks once again for taking time,

#4

And I’m trying to make it into 150!!! IMO, any certification / degree can be just as good as the person holding it, nothing less. Nothing more. But then again, for all I know the world is a bed of roses!

#5

I was originally confused by your post, because first you ask if it will help get you into a PE interview/role, but then you say you are doing the CFA program just for your own investments and learning.

Anyway, to answer your core question regarding PE: “”" would it help my resume stand out from the bunch that the hiring manager might be looking at? Would it help me get an interview?"""

The answer is no. PE is a even more difficult group to get into, and constantly the people who get in come from investment banking backgrounds. also keep in mind, PE or banking are not what the CFA program primarily targets.

you have to understand there are a ton of people who have passed L1 or L2. It doesn’t stand out anymore, and will marginally be noticed for directly applicable CFA-program jobs like AM or ER.

Add to the fact you have no finance background from school, I would have to say unless you know an insider that can somehow get you in, your chances are almost none. Unless you literally volunteer to work as an intern for free.

#6

Thanks iteracom… Actually, re-reading my post made it sound confusing even to me! What I wanted to say was that the CFA exam attempts were for my own learning process. If a by-product of that could be getting some PE interviews and/or an actual PE job THAT would be freaking awesome! So, just a random thought that I wanted to post there… But your answer was spot on. Thanks for that…

#7

I think CFA on it’s own doesnt stand out the way it used to…much less only passing L1 or L2. As Iteracom said, there are too many people who have done this already, plus you have no finance background. I would continue studying for the CFA and try to break into IB which is hard on its own. These PE guys are ridiculous, i’ve met quite a few and they all have years of experiences and went to top institutions.

#8

Thanks, but I still this, irrespective of all these you could still break into a megafund. Now granted, I do not currently possess the proof, but usually a bad workman with great tools would generally mean mediocre quality while a great workman with bad tools would mean exceptional quality…

#9

Thanks Ramos4rm… I wasn’t looking for CFA alone to launch me into anything… But am looking for that one interview… While in UG, although my school was definitely a target for all those “bulge bracket” companies, I couldn’t find a footing for the lack of finance based major… Now I think one another way I would try is to get into ER with the help of CFA and then try to get into PE…

ER should be easy I think! What do you say?

#10

I mean if you have a high gpa from a top institution, the CFA will be a great complement for you since you were non-finance. I would say buy side ER is more of a possibility than PE, but i wouldn’t call it easy. A lot of the PE ppl I meet with (granted theyre all GP’s, not your typical young associates) have all done their time as associates and their background is usually in the industry they are investing in plus a T15 MBA. Sounds hard to break into a megafund (Bain, Carlyle, KKR, Blackstone, Providence, Silver Lake, etc.) .

#11

Relatively, ER is easier to get into than PE. But it is not ‘easy’ by any means, and actually, it is still very difficult.

But you are correct the CFA program has more weight for ER.

#12

The way to get into PE right after undergrad is to have multiple IB internships, usually in the BB. Furthermore, most PE firms look to hire MBA grads, but there are a few that only hire straight out of undergrad.

Finance is not like other industries, small numbers of people can control huge amounts of capital, and most of these elite niches in finance are very small and extremely competitive. A few years down the line with good experience and an MBA you may have a strong chance.

I don’t know what your current employment status is, but if you’re unemployed and not finding anything, aim for the less competitive jobs like financial analyst etc.

#13

this.

my friend just got an associate positionat Bain before Macinsey before Wharton before A top tier private high school. he has a history of killing it.

#14

CFA has completely lost its value compared to MBA

Increased number of charterholder is the reason

#15

Currently I am employed at GE working in their IT sector! But I think I am better off working for a financial institution and try out my luck there… I think after all the discussions PE is out of question, maybe I would try for something like ER or Financial analyst postitions… Thanks for the response Palantir.

#16

Increased number of charterholders!!! I thought this is one of the most difficult things to achieve lol… Anyway, MBA is also on the cards for future, but presently trying to get my foot in the financial world and thats proving to be a challenge…

#17

Thanks iteracom… I think now I would focus on ER to begin with and after an MBA (hopefully at a branded univ) I would try once again to open the doors of PE.

#18

There are many, many, many more MBAs than charterholders.

#19

But Big firms look for MBA from top B-school not from any B-school

And for these people getting a charterholder is not tough

#20

So what you mean is CFA has completely lost its value compared to top-school MBA.

I suspect a top-school MBA with a CFA or progress towards it is still more welcome than a top-school MBA without.

And then one can compare CFA to a non-top MBA and it still looks good, given that there are 150,000 new MBAs in the US alone *every year* and there are a little over 100,000 Charterholders in the world.

Anyway, the fact that many more people are taking the exams does make it a less niche/elite designation, but that’s different from saying it’s “completely lost its value.”