Interview with a Private Equity MD

Every now and then Bateman Begins conducts interviews with professionals working in finance in India, but for this interview, we are going to switch things around a little. Today’s interviewee is a Managing Director at a major private equity fund in the US, and has worked on investments in India in the past. He was kind enough to have a wide-ranging conversation with me and some of his insights are absolutely fascinating.

Read on to find out what an MD has to say investing and business in India in the most detailed interview ever conducted by Bateman Begins. He’s an American, so you get the added bonus of getting to know an outsider’s perspective of doing business in India.

Tackling the 'Relevant Experience' Problem

The other day a reader emailed me to discuss some thoughts, and one point that he made has been at the back of my head since then. It’s something that I’m sure many of you can relate with, and is such an important matter than it deserves a post of its own.

All too often a finance hopeful hears the comment, “You’re good, but you don’t have relevant experience”. Most aspirants take it as a sign of rejection and try again elsewhere, even though this need not be the end of the line. It is a difficult obstacle to overcome, but by no means an insurmountable one. Read on to find out why. 

Financial Modeling: Free Resources

A question that I frequently get is, “Which financial modeling course should I use?”, or “Should I go for a classroom based coaching or will online courses be good enough?” In my experience, coaching is not required as long as you have a basic commerce background (CA or B.Com students) and are comfortable with MS Excel.

So in this post, I’ll provide you some free resources which you can use to learn everything you need to know about financial modeling.

The Great Debate: CFA vs. MBA

One of the most hotly debated questions among finance aspirants is the perennial CFA vs. MBA deliberation. Which of these qualifications will give you a better shot at landing that prestigious full time Excel Monkey Investment Analyst role? In this article, we’re going to have a no-holds-barred, all-out face-off between the two, to settle the question once and for all.

Read on to get the drill down on one of the toughest professional examinations in the world, the Chartered Financial Analyst (CFA), vs. the timeless and reliable MBA (I’m not going to insult your intelligence by expanding that).

Bateman Begins: Genesis

Bateman Returns.

After a considerable gap, Bateman Begins is back online and ready to bring you more on the select world of finance. But now, Bateman Begins will be expanding its mandate to a much broader territory. Instead of articles on just breaking into finance and interviews, you will now also get to know about personal experiences in finance – both mine as well as of those whom I’ve spoken with, along with a little bit of this and that.

It’s been over a year since I started my current private equity gig as well as Bateman Begins, and it feels like it’s been forever. I’ve talked about endless networking, cold-calling and about a guy who broke into finance from an IT internship, but I haven’t talked about how I broke in. I once mentioned how sometimes even someone you meet in a train can get you a job. Now while I didn’t stalk some poor guy during his daily commute, the way I got my job is just as bizarre.

Instead of telling you my whole story here, I’ll point you to the very inspiration of this website, Brian DeChesare’s M&I. Brian was considerate enough to run an interview with me on his website, so you can head on over there for a complete run down on how I broke in, what’s the industry like in India and what it is that I do at my job.

Read my interview here.

Enjoy, and as always, feel free to comment any questions that you have below! 

Quantum Dawn 2: War on Wall Street

When Patrick stepped into his office at 8 am, all he had on his mind was the trading strategy he would be adopting for the day and the dinner at one of the most exclusive restaurants in New York that he had planned for his wife later that evening. As head trader of a fund which had recently raised $5 billion, life was good for Patrick. Little did he know that life was going to sucker punch him that very day.

Trials by Fire & Water - Part II: Acing the Trials

After a bit of a gap, it’s time to get back to that elusive path to landing a job in finance. In Part-I of Trials by Fire and Water, you got the inside track on what typical investment banking and private equity hiring process are like and came to know of what you can expect in your interviews.

But of course, just knowing what hurdles you will be facing is not enough – you also need to know how to cross those hurdles and what mistakes to avoid. So in this post, I will attempt to help you do just that in Part II of Trials by Fire and Water – Acing the Trials.

Finance Books: The Best of Non-Technical Recommendations

If you are interested in finance and like reading, check out the books below. None of them are technical books – they’re all Wall Street War Stories. While some are hilarious stories of people who have worked in finance, others are gripping tales of hedge funds and the collapse of the world’s stock markets in 2008.

Every single one of these books comes heavily recommended and all are considered to be among the best books ever written on Finance. From a common-man point of view, believe it or not, some of the books listed here will beat the best thrillers that you have ever read.

Bateman Interviews: CEO - "I'm a guy who gets things done"

It’s been a while since I posted a new interview, so I thought what better way to get back to the job than an interview with the top guy in a company? I recently got a chance to have a lengthy one-on-one conversation with CEO of the biggest flower company in India. He is a person who has reached where he is today, solely on the basis of sheer hard work and a determination to move ahead. In today’s plethora of MBA-wielding C-level executives, it’s hard to believe that he is not even a graduate. Today, he has over 27 years of experience and is considered an authority in the retail and e-commerce segments.

Read on if you are interested in a wealth of free information in an uninhibited conversation, with the sort of person most of us don’t even get to meet. Without further ado, presenting Mr. Pawan Gadia, CEO, Ferns N Petals.

IB & PE Interviews: The Trials by Fire and Water

So you have finally received that interview call from the PE firm in Mumbai. Great, congrats! But now you’re worried sick about what exactly they are going to grill you on. Will you be asked to pitch stocks or be required to build a full-blown DCF model in an hour?

Well, if you know what PE is, then you know you won’t be pitching stocks in the interview; but yeah, that DCF model with multiple scenarios is fair game. And now that I have successfully scared you about IB/PE interviews (if you still aren't scared, you should be – thinking back on my own interview experiences still gives me the chills), let’s talk about just what happens in IB & PE interviews. In Part II, we’ll see how we can come out of these grilling sessions alive and in one piece.

Like any other industry, there’s no fixed rule for the interview process. However, there are certain parts of the interview process that you will find in all IB and PE interviews. In keeping with the theme of the blog, this post will give you a true sneak-peak into the interview process at most firms.

Read on to know all about IB & PE Interviews: The Trials by Fire and Water.

Breaking In: From IT-support to PE Fund Manager

Wait, what? After all my raving on how it is near impossible to break into IB from back office financial analysis, now I’m talking about freaking IT support intern to Private Equity Fund Manager?

All right, calm down. You see, the key words in the above sentence are “near impossible”.  This is the story of a guy who made this seemingly impossible story turn true. He went from being an intern in IT-support to Investment Banking Analyst to where he is today – running his own PE fund.

Read on to find out if fairy tales exist in real life.

Private Equity: The Inside Story

In the previous post on Private Equity, I provided an overview of what the industry is all about. But for those interested in knowing the minutiae of how a PE firm operates, this post will satisfy their queries. It is a gloves off, no-holds-barred post which will tell you all about the internal workings of a Private Equity firm.

Fair warning: Hold on to your horses, folks. This one is gonna get technical. In case you do proceed, make sure to read to the end - that's where you'll find the best part.

Private Equity 101

Since the inception of this blog, I have been talking about Investment Banking. But what about the other areas of “high finance” – IB’s cousin Private Equity and the distant relative called Hedge Funds? So today, let’s go pay a visit to that rich cousin whom IB envies – PE.

This is the second post in Bateman Begins 101 Series and will introduce you to the little-known world of Private Equity. You can get the definition of PE from anywhere, but below you will find out what actually happens in PE, why it is considered to be “better” than IB and most importantly, why it is so bloody difficult to break in.

So without further ado, introducing Private Equity – the promised land. What even investment bankers dream of.

Life in IB: The best IB story I've ever read - From WSO

Came across this gem on WSO and just had to share it. It's written as a comment by one of the best posters on WSO and I wanted to share it here. It is without a doubt the among the most awesome IB stories I have ever read. Kudos to rufiolove!

Background: The original poster had posted some tips on how to get out of getting staffed on weekends. The relevant tip is below, followed by rufiolove's comment.

Caution: The language used below might not be suitable for sensitive readers.

Breaking In: Cold - Calling

Now that you have read the interview with DivyaAggarwal, it’s safe to assume that you must be even more interested in getting into IB. Because if you are not, then you are reading the wrong blog. So let’s come back to the ways which can turn that IB dream into a reality.

In my earlier post about methods of networking, I mentioned that cold calling is one of the most effective ways of breaking into finance. This post will tell you how to cold call so that you can get the best results.

Also, some reminders:

• Cold calling works best at the smaller places. So if you’re targeting BB banks, you might want to rethink your strategy.

• Do not expect success in 10 phone calls. If you’re calling for a job, you might have to try anything from 20 to 100 times, or even more, before you get your first tangible lead. But if you’re calling for an informational interview, your chances are much better.

• But, all it takes is one affirmative answer to turn that lead into an interview.

Bateman Interviews: "A day in IB begins with a BBM and ends with a BBM"

I recently had the opportunity to speak with Divya Aggarwal, an Investment Banking Analyst at Avendus Capital, one of the top investment banks in India. She was excited to learn about this blog and was happy to provide an inside peek into the world of IB. Over a course of 3 weeks, I was finally able to finish this interview (read on to find out why it took so long).

Divya Aggarwal is a qualified CS and CFA L2 candidate and has past experience in Consultancy at Mckinsey and M&A advisory services at KPMG. And below, she’ll give you answers to whether IB is like a relationship or a marriage, why analysts have a love-hate relationship with their Blackberry and why even investment bankers aspire to move to the buy side.

Networking - How a casual conversion in a train can get you into IB

A friend recently pointed out to me that networking techniques are relevant not just for IB, but for every industry out there. While this is true, the reality that I have seen is that a very small percentage of youngsters who are just starting out resort to networking.

The reasons may differ from hesitation to simply a lack of awareness as to how to network. Therefore, as I promised earlier, this post will be dedicated solely to networking methods. Read on to find out the best methods for networking in India.

Breaking Into Investment Banking

Now that you are sufficiently educated in what investment banking is, the question arises as to how to actually break into this industry. This is gonna be a long one, but I'm gonna make it worth your while. Read on to find out why.

 A select world:

The usual advice prospective monkeys get is to work hard, prepare for interviews, so on and so forth. No one ever tells how to get that interview in the first place. Because make no mistake, landing an interview in IB in India itself is no small matter.

The Investment Banking Hierarchy

Now that you know what investment banking is and what bankers do, the question arises as to which stage you will fit in and what you will do. Without further ado, let's jump right in.

So which level monkey are you?

The IB hierarchy is well defined and rigorously imposed. There may be minor differences in naming at some banks, but the generally accepted designations are as follows: 

Bateman Interviews: Investment research in three distinct fields, breaking in and more.

For the inaugural interview with Bateman Begins, I have with me a Chartered Accountant, CFA charter holder and one of the most active volunteers in the Indian CFA Society. With almost 10 years of experience in hedge funds research, credit analysis and bond trading analysis, he has been at the centre of a universe which most of us only dream of.

An avid educational volunteer and guest lecturer at several reputed institutions, there are few people better placed to advise prospective monkeys. So without further ado, I present to you Mr. Biharilal Deora in the very first of Bateman Interviews: