It’s always tricky to know what questions to ask in a private equity interview if you’ve never actually had any private equity experience before. You want to look like you’re excited about the opportunity but also don’t want to come across as clueless.
Don’t worry — we’ll take a look at some solid questions to keep in your back pocket for any analyst or associate interview.
Best Questions to Ask in Your Private Equity Interview
Here’s a quick list of 15 solid questions for you to leverage in your next PE interview. Take a look and tweak as needed for your specific needs.
- What is the firm’s key point of differentiation vs. peer firms utilizing a similar strategy? What is their edge (whether in deal process/execution or via longer-term value creation)? — Good to understand their investment style/strategy and see if it aligns with what you’re looking for.
- What level of interaction do you typically have with your associates? — This is helpful to ask, particularly with more senior interviewers, to get an idea of what type of visibility and exposure you’ll have within the firm (or if you’ll just be stuck in the model 24/7).
- Are there any current trends, themes, or theses you’re focused on? — Great way to show you’re interested in digging deeper, and also a good way to evaluate the firm. You’ll get some insight into whether it’s some bucket shop that will go after whatever CIM comes in, or if they take serious time to develop investment theses before going out and executing on them.
- What is the typical career progression for an analyst/associate at the firm? Is there an opportunity for high-performers to stay on through senior associate/VP? — You may already know this answer if a firm has a strict, published policy; if not, it’s great to understand whether you have any upward mobility.
- How does the firm source deals? Are they typically banked processes or is there any element of proprietary sourcing? If the latter, what does that look like (industry relationships, cold calling, etc.)? — It’s helpful to understand any differentiation the firm may have via an ability to source deals outside of competitive processes. It’s also helpful to know if you’ll get stuck sourcing, which is relatively common in growth equity and the lower middle market.
- What is the firm’s approach to working with portfolio companies? How involved are associates? Do they attend board meetings, etc.? — Some people value operational portfolio company work, and some hate it — either way, it’s good to understand what you’re getting yourself into.
- What is the firm’s approach to ESG (environmental, social, and governance) issues? — A solid question to ask if you’re interviewing with a firm that prides itself on its ESG initiatives. Some firms place a lot of emphasis on this, so it’s a chance to further demonstrate why that firm is a top choice for you. Obviously, tweak it to incorporate prior research you’ve done and probe deeper on items you can find online.
- What is the firm’s approach to diversity and inclusion? — Exact same reasoning as the point above: it’s a great chance to show you did research and underline why you’re so interested in this particular firm.
- What is the firm’s approach to training at the analyst/associate level? — Always helpful to know if you’ll be tossed in the deep end or given some guidance. Some firms also have helpful ongoing management and professional development programs that associates can utilize (potentially even sit in on sessions with PortCo execs).
- Does the firm have any internal functional area resources that portfolio companies draw on? — Some firms emphasize their internal capabilities that they use to accelerate the growth or professionalization of PortCos. This can be a big edge in the middle market where it has an outsize impact, with many sponsors lacking these capabilities (vs. megafunds or UMM that have more resources at their disposal).
- What is the associate’s role within the deal team? Do they solely work on the model and diligence analyses, or do they have the ability to contribute to thesis development, investment committee presentations, portfolio company management interactions/strategy, etc.? — Good to know if you’re signing up to be chained to a model or deck, or if you have an opportunity to participate in some of the more interesting parts of private equity.
- Piggy-backing on the prior question, how are deal teams typically staffed? E.g. one analyst, one associate, one VP, one principal, one partner, or certain variations of that? — Can be helpful to understand what level of responsibility and exposure to expect, as well as, potentially, some insight into workload.
- Do you utilize operating partners or senior advisors? If so, which portions of theme development or deal execution do they participate in? What role do they take with the PortCo after the deal is complete? — Just another helpful item to get more background on the firm’s strategy. Some firms will only do deals if they have an operating partner providing industry insight, while others don’t care and figure they already know everything they need.
- What’s your typical check size and how much flexibility do you have (co-investors, LPs, etc.)? Will all deals be straight buyouts, or is there any flexibility in the mandate to explore minority investments or earlier-stage, growth-like deals? — Again, just helpful to get more background on the firm’s approach, and shows you have a deep level of interest. You might find a broader range of deal types is more interesting, or you might not care (which is totally fine).
- What does the investment committee process look like? How often do you go to IC for each deal (once, or each round of bidding)? Is it memo-based, deck-based, etc.? — Helpful to get a better idea of the type of work you’ll be doing. Also a potential way to judge workload. If you have weekly IC updates through a deal process you might have a ton more work to do than a firm that only hits up IC once for approval.
How to ask your interview questions
When choosing what questions to ask in your private equity interview, be sure to follow a couple of ground rules:
Most importantly, don’t plan to ask this many — pick 3 to 5 that are most applicable to the opportunity. Cover these at the end of the interview when you’re given an opportunity to ask.
Otherwise, it’s always great to weave in questions throughout, especially as your interviewer discusses the firm. Don’t be aggressive or pushy (more important to hear their story), but don’t be afraid to show some engagement with, and curiosity in, what they’re saying.
Last thing: research the questions you plan on asking
The most important thing to remember is that you can’t just shoot off a bunch of random questions without doing your homework. The list above is a good starting point, but you need to tweak it for each firm.
Check the firm’s website and note all the information they provide on it. Use that information to craft your questions, aiming to dig deeper on what they provide. Make sure you don’t ask things that they’ve already covered.
With that, you’ll be good to go and one step closer to locking up your offer.