• 127 09/08/2021

    This interview is focused on getting a post-MBA or "partner track" job in private equity. My guest, Brett Lacher, has secured private equity jobs at the associate, senior associate and VP level. He also taught a course on the subject at Columbia University where he earned his MBA. 

    While the interview is focused on private equity, the advice Brett provides is useful in any competitive industry. In any process where the compensation offered is extremely attractive, you have to develop your own process to get in front of the individuals making hiring decisions. It may sound like a lot of work, but if you don't put in the time, it will limit your odds of success. 

    Fortunately, the process required to land a more senior private equity role is unique in that it closely resembles aspects of the job itself, in particular as it relates to sourcing investment opportunities and convincing sellers to work with you. It's likely that the network you build to land a job will be useful to you for years to come. Please click on the video below to learn more. 

    TIMESTAMPS

    03:05 Interview Objective
    03:40 Unique Parallel Between the Job and the Process
    05:30 Types of Private Equity
    06:20 The Right Fit (and Getting Comfortable Hearing "No")
    07:22 How the Skill Set Evolves from Analyst to Partner
    09:03 Partner Track Hire
    10:56 Building the Model is the Base Requirement
    13:10 Personal Preparation
    16:44 Develop a Network of Private Equity Firms
    18:25 Match Personal History with Fund Type
    20:52 Cold vs Warm Emails and Introductions
    24:15 How to Follow Up
    25:25 200 Conversations to Get the Job
    26:20 Email Tip: Google Snooze
    26:41 Persistence Pays Off ("I never respond to the first email.")
    27:50 The Private Equity Coffee Chat
    29:50 Start 6 Months to One Year in Advance
    30:28 One Pager
    32:33 Actual Interview Preparation
    33:51 The Value of Taking Notes
    34:40 Turn an Interview Into Dialogue
    35:18 Post-MBA Interview Format
    39:53 Develop Questions for Each Interview
    42:07 Interview Tips
    45:41 Never Know When You Are Being Evaluated
    46:30 Send a Thank You Note
    47:38 Follow Up (The Same Way PE Professionals Follow Up on Deals)
    51:53 Prime Your Mind
    52:26 Know When to Take a Break and Rest
    53:11 People Work VERY Hard to Get the Job
    54:38 Post Job Offer
    58:34 Leverage Offers to Get Offers
    1:00:51 What to Do Once You Have an Offer
    1:04:00 Dealing with Recruiters
    1:05:52 Q&A

 



  • 126 08/18/2021

    Interested in the CFO role? I recently interviewed two talented individuals on what it takes to join the c-suite. Amazingly, under their leadership, both of the companies these two CFOs worked for grew from double digit millions of revenue to well over $1 billion of revenue. One company grew organically and the other largely via acquisition, which provides for two interesting perspectives. 

    I have known them both for years, and I was delighted when they agreed to be interviewed. You can find their bios below (names have been changed to fictitious characters from the movie Wall Street).

    Bud Fox: Fox has held the CFO role at three distinct companies across various industries. He joined [Company A] in 2011, and saw it grow from a lower-middle-market company to north of $1 billion in revenue. 

    Gordon Gekko: Gekko’s experience includes a variety of leadership positions. Most recently he was the CFO of the fastest growing [industry] company in the country (grew from $50 million to $1.75 billion in 7 years). He is also an adjunct professor of finance.

    The PDF available for download details both interviews. The topics addressed are summarized below:

    The Base Requirement: The foundation, as described by Fox, is a thankless job that must be perfectly executed. The critical work, unnoticed by the rest of the organization, is the effort required to close the books, work with auditors, and produce information (examples, but not an exhaustive list). 

    Transition to CFO: Per Gekko, a CFO generally comes from one of two places: (1) the accounting side of the business, or (2) the finance / business strategy side of the business. To transition from the former requires a shift in perspective.

    Information: The CFO role is a bridge between finance and the rest of the company. In that vein it’s important to interact with all functions within the organization.

    Recruiting: A strong recruiting practice is necessary to have the confidence that the basic functions will continue seamlessly if the CFO is promoted from within.

    Technology: On this topic the response was simple and nearly identical on both calls; invest in technology early and often. “Don’t ever skimp on technology.” 

    Day One on the Job: What is your immediate priority day one on the job as the CFO of a new entity? Fox and Gekko had different reactions, which are outlined in the PDF document.

    Going Public: The notes conclude with some commentary from Gekko on the subject of when to go public. 

    Please click here to download the full PDF notes.

    How to Become a CFO
 



  • 125 08/04/2021

    Why does a private equity fund have both a general partner and a management company? In the lesson titled Private Equity Fund Structure, which is available as part of the Private Equity Training curriculum at ASM, the financial sponsor (entities that control the fund) is defined as follows (please refer to the image below for a visual).

    Financial Sponsor (“Sponsor” in image): The team of individuals that will identify, execute and manage investments in privately held operating businesses. This is generally comprised of a General Partner and a Management Company.

    1. General Partner (GP): The entity with the legal authority to make decisions for the fund. This entity also assumes all legal liability.
    2. Management Company (aka fund manager, investment advisor): The operating entity that employs the investment professionals responsible for allocating capital and managing investments.

    Private Equity Fund Structure Diagram

    The management company is generally affiliated with the GP, but they are not the same entity. The GP will enter into a management agreement (or investment advisory agreement) with the management company. Under this agreement the fund pays the management company fees to employ the investment team, evaluate opportunities, manage the portfolio, and manage all day-to-day operations.

    This is a common structure that allows the management company to work across multiple funds while still having a GP for each fund. It is not uncommon to see a private equity firm scale and raise new funds in the process. Over time the same management company could be affiliated with a handful of funds (GPs). 

    The management company owns the firms branded assets and intellectual property, which include the name of the firm, the track record and any proprietary processes the firm has developed. This helps the management company raise new funds and allows it to build goodwill across funds.

    In summary, each new fund must have its own general partner, but the accumulation of knowledge and processes resides in the management company providing the private equity firm with economies of scale. 

    Please see the Private Equity Training curriculum for more detail.

     
 




 



Models are:
 
A) really boring
B) pretty sweet
C) super important
D) somewhat easy
E) kind of hard
F) fun
G) all of the above

 

 


*Answers a, b, c, d, e, f and g are all correct.