The one skill you need to land a private equity job
It’s a pretty good time to be working in private equity. Pay is fantastic, the work is interesting and, unlike investment banking, the long arm of government regulators has yet to squeeze the industry’s throat. So how do you get the job? An impeccable resume, of course, but a warm smile goes a long way too, according to the co-founder of Blackstone.
Stephen Schwarzman, head of one of the world’s largest private equity firms, said he doesn’t look for your stereotypical Wall Streeter in recruits. "To be hired at our place and work with us you have to be nice. I don't like people who are not nice,” he said at an industry event on Tuesday, according to CNN.
"They can be very, very smart, but they are the kind of person you wouldn't want to spend time with or expose your people to. They may fit somewhere else, but they don't fit with us,” he added.
Rather, you need to be the Jerome Bettis of candidates: one who has the “resiliency” and “grit” to gain those extra yards after contact, Schwarzman said in a string of football-related clichés.
Perhaps more helpful, Schwarzman stressed that you don’t necessarily need an MBA to find work and be successful at Blackstone. He pointed to Jon Gray, head of Blackstone’s $79 billion real-estate group, who never went to business school. "We've had a debate about this," Schwarzman said. "Jon's got a gift. Obviously an MBA wouldn't have improved it too much."
And Gray is far from the exception to the rule. Joseph Baratta, who leads Blackstone’s $66 billion private-equity group, is MBA-less. So is David Blitzer, head Blackstone’s awesome-sounding “tactical opportunities” group. However, know that Schwarzman himself has an MBA – from Harvard. Plus, he admitted that some young hires "usually hit some type of ceiling" and need to go back to school. It’s simply up to ability, he said.
Meanwhile, the industry appears plenty healthy. Schwarzman took home a modest $690 million last year. Leon Black, CEO of competitor Apollo Group, made $331 million. Henry R. Kravis, a co-founder of KKR, received about $220 million. Plus, as much of private equity pay is derived from carried interest, private equity execs pay just the 23.8% federal capital gains tax rate. Big hitters in other industries, like banking, see up to 40% of their paycheck taken by Uncle Sam.
Here’s a list of 25 real-life interview questions asked of MBAs by corporations in need of finance talent. How would you do?
Investment banks are hiring for jobs that have been open for months, many in New York. Do you have the right skills?
Like Goldman Sachs before it, J.P. Morgan is reshuffling its M&A management team. Anu Aiyengar and Henry Gosebruch have been named co-heads of North America, while Dirk Albersmeier and David Lomer are taking over in Europe, the Middle East and Africa.
If Citigroup fails its upcoming stress test from the Fed, Chief Executive Michael Corbat and other top management could be out on the street. So Corbat’s career is basically resting with Citi’s fix-it man, Gene McQuade, who Corbat dragged out of retirement last year to ensure the bank passes. McQuade was just compared to Sully Sullenberger, the pilot who successfully landed an airplane in the Hudson River, so Citi and Corbat should be safe.
We knew the job cuts announced by RBS last week would be brutal, but no one imagined they would be this bad. The bank plans to eliminate as many as 14,000 jobs within its investment bank, which is rather substantial considering the unit only employs 18,000 people. No one is safe.
The environment isn’t much better at Barclays. Chief Executive Antony Jenkins told reporters this week that he is “not a very patient person,” and isn’t afraid to make further cuts to Barclays’ investment bank. "We won't hesitate to continue to optimize capital allocated to the investment bank, the cost base and revenues to generate those returns,” he said.
Bank of America Merrill Lynch Executive Vice Chairman Harry McMahon is stepping down in what is said to be a planned move. He worked on hundreds of deals over his career.
Buzz Around the Office
Former Abercrombie & Fitch CEO Michael Jeffries had special instructions for the actors and models who worked on his private jet. Men needed to be clean-shaven, fitted with Abercrombie polo shirts, boxer briefs and flip-flops, along with a “spritz” of the firm’s cologne. The Phil Collins song “Take Me Home” would be on repeat in the background.
Quote of the Day: “If you don’t stick to your values when they’re being tested, they’re not values. They’re hobbies.” – Jon Stewart