Private Equity

Does the CFA Charter help in looking for private equity jobs? I understand that the industry also requires relevant work experience and strong academic credentials.

Not really.

I think it def helps given you have the appropriate credentials (academic and experience)

I suspect it helps, but not as much as PM with public securities. PE seems to value company modeling skills, management evaluation skills, and deal generation skills most of all, and then the VC groups also value science/technical knowledge that might be needed for companies that develop new products. CFA can show that you know your way around a balance sheet and income statement, which is better than nothing, but it’s hard to compete with folks that have an IB background with training program, if you don’t have that already.

From personal observation (numerous friends / old colleagues in PE): MBA highly regarded (I live in UK, so this is not self-evident). I would say that if you are pre-MBA, IB experience is best, then perhaps the ACA/ACCA (they like accountants), then perhaps experience at a big-name consultancy firm (those guys too). CFA will definitely give you some credibility, but not as much as the aforementioned “options”. Also agree with bchadwick

How about CPA associate for PE? (passing the CPA without any experience)

you won’t get a PE gig without experience, let alone a IB gig.

Top MBA in London and across US. The old ACA way was the old English way but London has become very US centric and you see the same MBA routes now applying.

so, in the past, most new PE men were ex-CA’s? What type of CA experience was valued?

I don’t think the CFA charter helps you to look for private equity jobs much. They care much more about work experience, modeling skills, and relationships. I passed Level I at the time that I started looking for private equity/buyout jobs, and while knowledge of stuff like cash flows and depreciation that I learned from Level II helped me in certain interviews, not one person ever asked me about my CFA pursuit (or lack thereof). They cared much more about my pedigree (undergraduate degree, GPA, awards) and actual work experience (several years in sell-side research). I will begin working at a private equity/buyout shop in a couple of weeks, and am no longer pursuing the CFA charter.

in my 3.5 years of experience, i agree it probably doesn’t help much, but doesn’t hurt. the cfa is actually pretty common among many institutions (pensions, endowments, etc) that invest in pe funds and fund of funds so i’m sure they appreciate seeing it in the people they invest in.

numi, is there anyone at your PE firm that came from a MM IB?

billwest – there definitely are. Keep in mind that the firm I work at has dozens of investment professionals ranging from pre-MBA to the most senior people, so inevitably you’ll see folks from a variety of different backgrounds. The majority of them were ex-bankers, though there are also a fair number of people that came from industry. One example of such personnel are the operating partners, since they can draw upon years of business experience as well as connections from the industries they had worked in. Among pre-MBA’s such as myself, there are some people from middle-market banks like Greenhill, Piper Jaffray, and other banks of similar rank. Are you interested in PE? Been a while since we last corresponded so I’m just wondering what you’re up to these days and what you’re thinking about career-wise.

numi, I’m now at a tier-2 bank (although some would group it into the BBs) and am planning my next moves. I’ve worked on some PE/sponsor deals and am thinking whether that that’s for me. I read your post about your move and it got me thinking about moving into PE in the future. After some thoughts, I find myself more interested in something like GS PIA (not that I can get in now though) as I like the global nature of their investments and the ability to invest across all asset classes. As far as I know, PEs are restricted in the types of investments that they make due to the high leverage in their deals (although this has changed a bit with the growing popularity of investing in mid cap companies or taking minority stakes). Having said that, I think if a PE were to wave their arms at me now I’ll hop over too as it’ll give me great experience for the future. Another thing that is different between us is that I’m based in Toronto now. There are very few big PE firms in Toronto (where Toronto=Canada) so I think I have to take an intermediate step and get an IB job in NYC first before my move into the buyside.

cool…private equity hiring at the junior levels is nearly non-existent at the moment, but if you end up seriously considering it, feel free to drop me a line. i don’t know what the PE scene is like in canada…who are the major players there? and yes, doing a stint in IB in new york isn’t a bad idea if you want to get some good buy-side gigs, especially if you can get into sponsors or M&A. but if you are in a tier-2 bank already, why not move directly to the buy-side if that’s what you want to do? are you a second year analyst right now?

i’ll send you an email to discuss offline.