There have been a few FoF questions lately, but here is a slightly different one. I have been at a PE FoF for 2 years (out of undergrad). We do primary investments and secondary investments. Secondary investments are buying pieces of older PE funds - effectively we value all companies held in the portfolio and project exit values and bid accordingly. I spend about 50% of my time doing valuation work for the secondary side of the business. Would this sort of experience apply to an equity research position? Would it make me a more attractive candidate for such a position? note: I passed Level 2 this June
I was fortunate enough to get into equity analysis out of college. In my opinion, what you know is much more important than your work experience (obviously, the older you get, the more that these two factors tend to converge). A lot of posters on the forum trying to get into equity analysis wonder if past work experience that’s indirectly connected to it will be enough to allow them to make the transition. In my opinion, and someone please let me know if I’m off here, it would be much easier to get into the buyside if you displayed on your resume and during the interview that you know how to invest on your own. It probably will take awhile before you can develop a track record that beats a benchmark, but at least begin investing on your own with independent research. If I was a PM looking to hire an analyst and had 300 resumes sent in, I would probably eliminate most candidates who have 0 work experience in the field. If, however, I saw a guy who was previously in a PE FoF for 2 year also send me a report analyzing a specific company (DCF model, comp. sheet, key information, maybe a review of a call to management), I’d become extremely interested because it shows that 1. he/she knows what they’re doing and 2. he/she is interested in this type of work. The PM who hired me told me I was chosen over 150 other candidates, 10% of which went to Penn. The main reason was because I sent in a analysis report I did on my own during my senior year of college. A lot of people say that the only way you can get into this type of job is through netoworking, networking, and networking. I think that helps, but showing that you know how to invest and care about it are much more important and profitable to make it into this field. Hope this helps
Thanks for your thoughtful response gobucksgo
Any other feedback on how the secondary valuation work might translate into an equity research job?
gobucksgo - are you based in Milwaukee?
I would agree that for bs you actually have to know how to invest. Willy