Top 5 Skills Needed to Succeed in PE

1. 很好地了解行业，并能够清晰地向合作伙伴表达潜在的投资思想

2. as an associate, don't mess up the numbers.

3. 了解如何建立交易结构和为什么-μch preferred, how much debt, etc and the tradeoffs for each structure

4. 能够与管理团队聪明地谈论他们的业务，因此他们实际上喜欢您，并且不认为您只是在试图搜寻。

5. Don't be afraid to source your own deals.

Out of curiosity, what ARE the advantages of different deal structures?

studentx -- what a silly comment

Patrick, at the pre-MBA level, how much did you actually spend thinking about deal structures? Anyone else who's pre-MBA and doingPE, can you please comment? I find that although I do a fair amount of modeling and investment analysis, I'm not really asked to think about deal structures -- I'm sort of just told by the senior folks on the deal team what they're thinking about and why, and I have to implement that. I guess that's part of the learning process, but it's not like anyone comes to me and asks me to think about how I would structure a transaction. I'd be curious how this compares to the experiences of others on this board.

Hey aloki, different considerations for deal structure as follows:

1) How much debt can we get to help reduce our equity check and juice our returns... obvious downsides to overleverage must be taken into account

2）我们必须向管理层发出多少纽科？他们是新团队吗？期权的10％至15％的业务？交易价格（理论上第1天）与交易价格2倍的交易价格应以1倍的价格打击多少？

3）我们投资于纽科的安全性如何？管理选项是否可转换为Common，我们拥有转换的首选安全性？我们喜欢的清算偏好呢？在普通人看到一分钱之前，是否需要8％的回报？

这些交易条款中有很多是根据您工作的地方设置的（某些公司更喜欢某些结构）。关键是您想在资本结构中占据一席之地，以限制您的下跌一路并最大程度地提高您的上行空间 - 同时试图使您的激励措施与管理层保持一致。

Does that answer some of your question?

-Patrick

numi:

studentx -- what a silly comment

Patrick, at the pre-MBA level, how much did you actually spend thinking about deal structures? Anyone else who's pre-MBA and doingPE, can you please comment? I find that although I do a fair amount of modeling and investment analysis, I'm not really asked to think about deal structures -- I'm sort of just told by the senior folks on the deal team what they're thinking about and why, and I have to implement that. I guess that's part of the learning process, but it's not like anyone comes to me and asks me to think about how I would structure a transaction. I'd be curious how this compares to the experiences of others on this board.

Hey numi, as a pre-mba I definitely did very little of the deal structure decisions for new deals based on the simple fact that we had a pretty standard set of terms we would go for...but there were some messed up capital structures on some of the old portfolio companies we owned. In those cases I was given a bit more flexibility to get creative.

On the new deals I was also responsible for negotiating the covenants with the banks...making sure that even under a downside case we could scrape by and that the way we were modeling the ratios matched up with the credit agreement, etc etc...not anything too fancy.

我做了一项非常复杂并需要整个团队创造性思考的交易……我的意思是，为了成为一个伟大的合伙人，您应该了解这些结构如何工作以及为什么要A，B和C结束x，y和z。这样，当您接近更复杂的交易时，您实际上可能知道增加价值的东西，尤其是当您最接近＃s ...

This conversation is going great.

Being a great associate (rather an effective associate) is very important and your "perspectives" are superb. I mean I had a very basic idea of what skills are needed but (again) you brought in your perspective.

让这个线开花。

V

say that you don't likePE或者are not good atPE, what do people normally do? This is say for a postMBArole so business school is not an option.

I would think that going back to banking is a no-no and the only progression would be to a hedge fund?

Sorry to sound so general - I was thinking of someday making a transition toPEbut wanted to hear from people within the industry...

It honestly depends on what size firm you are joining. At a firm with a strict heirarchy, a post-MBA associate will probably get their hands on a little deal structuring, but will most likely just get more first stabs at alot of things like the investment memo. My friend works at a smaller firm in the midwest, and his post-MBA handles all the deal execution for all smaller tuck-in acquisitions on a day to day basis.

像Patrick, some of the stuff that I find a little fascinating is the structure of the legal entities. Especially if the company is an LLC or not - whether they're issued units or options. If they're issued units, who of the management team (if any) gets to buy into the A units and what the waterfall is like for the management team, structuring the time/performance/exit incentives, etc.

I recently worked on forming a new LLC for one of our PC's because new management was replacing old management and without getting into too much detail I was left to work with our counsel on how to structure the pro-rata B-unit distribution to the new management team. I thought that was one of the more interesting things I've done since joining.

gametheory,

Very cool. I also find the legal entity structure fascinating and have been involved in the creation of various structures including: LLCs, LPs, c corps, and even LuxCos. We recently consolidated several of our portfolio companies into a Limited Partnership holding company.

My group is very small, which has provided me with the opportunity to work on all aspects of several billion+ transactions from preliminary valuation work, legal/tax/audit, structure, management interviews, roadshows, and confirmatory due dili. So I agree that the size of the firm and the way that it is managed differs across firms. With that said, I do not think that there is a standard skill set that is easily defined. The most successful people I know in the industry have superb critical thinking skills, organizational/compartmentalization of information, and can present their views in a confident and concise manner.

WallStreetOasis.com -- thanks for sharing your feedback on your pre-MBA experiences. In your view, can you comment on what skills are most important or valuable at the pre-MBA level? The reason for my inquiry is because assuming that I decide to stay inPEpost-MBA, I'd like to really zero in on the key skills that firms are going to look for during business school recruiting. A lot of what I do is industry research,354manbetx , analysis ofdata room文件(客户、SKU的区域操作data, and stuff like that), and evaluating potential investment opportunities -- in fact, I would say that the vast majority of my responsibilities are in these areas. I participate on some calls with lenders and accountants occasionally, but not too often. My role is focused on transactions and I don't do any deal sourcing.

gametheory-- you mention an interesting point about a strict hierarchy. I work at a larger middle-market firm, and to be frank, I feel like a lot of the senior folks have an idea as to what the pre-MBA responsibilities should entail (namely the research, modeling, analysis, and that stuff) and it's hard to break out of that. On one hand, I understand that in order to move up in the field, one has to learn by experience, but on the other hand, that's hard to do when the firm seems to have such a regimented structure. That being said, I definitely notice that one's deal team experience can vary greatly depending on who the partners and principals are on their team. That being said, have you found any particularly effective ways to take on new roles in yourPE经验？您认为使您与特定交易团队的体验变得好（或坏）的最重要因素是什么？只是试图寻找可以在具有结构化层次结构的公司中扩展自己的角色的方式，有时很难。

numi, I think the pre-MBA skills are similar to what you develop in i-banking. strong analytical foundation with an ability to communicate clearly.

对于初学者，您需要为354manbetx 为了运行老年人要求的各种交易结构和方案。一旦您沮丧，如果您可以自我激励，那么让您成为一个好的MBA助理。

A tough part of the transition for many bankers in toPEis that you are given much more freedom inPE（通常）。然而，有了自由，责任和自我激励的需求。我知道对我来说很难从80-100小时的工作中跳起来，从根本上讲我可以狗屎 - 到整天的大部分时间里，人们都会让您独自一人，如果您没有完成工作只是在你身上。

Critical thinking!

^nice