Blog #2: Private Equity

When I first applied for the position of an intern at a private equity firm, I imagined that I would be talking to brokers and making pitches to my boss about prospective buys. I imagined top-level executives sitting around a table discussing high risk, high growth ventures. This internship has proved over a period of 2 months that some of these stereotypes are just not true and that a lot more goes on behind the scenes. When I first heard the business philosophy of the firm, I was slightly taken aback. They wanted stable, steady growth unlike other larger players in the private equity market who went after high-growth enterprises. ‘Boring’ isn’t a word that is usually associated with investments, but in this case, the business plan was centered around that word. The word ‘boring’ shouldn’t have a negative connotation because in this case, it’s a niche which many private equity firms do not look at. This provides so many more opportunities in a niche category that is being overlooked. You only ever hear about the successes, not the failures of high-risk firms and sometimes it’s better to take the more stable option.

There is also a lot of work that goes into making a deal happen, and more often than not, many deals end up falling through before a successful one happens. The owners of a business may be unwilling to sell or unhappy with the valuation. Sometimes the profit margins may be extremely unattractive and totally different than previously estimated. A lot of data collecting is needed for a short conversation with brokers to get an upper hand in negotiations and this entails hours sitting in front of Excel sheets and search aggregators. Nevertheless, the work culture is flexible and employee motivation and involvement are a top priority. The job title may say ‘Intern’ but I feel truly involved in the inner workings of the business and all it strives to achieve.

Leave a Reply

Your email address will not be published. Required fields are marked *