INSEAD Alumni in Private Equity PRIVATE EQUITY ASSIGNMENT - RESEARCH PROJECT

Transcription

1 INSEAD Alumni in Private Equity PRIVATE EQUITY ASSIGNMENT - RESEARCH PROJECT GROUP 9:CHEN YU, KHAMITOV TIMUR, PARKOV VLADIMIR, TAN ANNIE, VISWANADHA KAUSHIK SRIRAM

2 Executive Summary Based n the survey results, as well as the interviews with INSEAD alumni, there are three findings related t INSEADers career in PE that we wuld like t highlight, as fllws: 1. Cnsulting and finance & banking are the mst cmmn career ptins fr switching t PE. Based n ur survey, 85% f the respndents did nt wrk in PE befre INSEAD. Amng these, 64% went int ther industries befre switching t PE, 36% went int PE immediately after INSEAD. In the frmer case, 43% went int cnsulting, while 19% went int finance & banking; in the latter case, 38% had cnsulting experience prir t INSEAD; 31% had wrked in finance & banking pre- INSEAD. 2. INSEAD alumni wrking in PE are spread acrss different types f funds and gegraphies. Amng the survey respndents, 31% wrked in buyut funds, 26% in VCs, 16% in grwth funds, while ther types make up 27%. Gegraphically, 59% primarily wrked in Eurpe (14% in UK and 45% in Cntinental Eurpe). APAC (including India) makes up 17%, fllwed by Middle East and Africa with 7% and 6% respectively % f respndents cnsider the INSEAD experience useful fr switching careers t PE. A majrity f respndents pinted ut financial skillsets as being particularly useful fr a PE career, fllwed by INSEAD brand credibility, knwledge abut the PE industry, and the brader business perspective gained at INSEAD. 1

3 Table f Cntents PE Research Assignment Paper Grup 9 Chen, Khamitv, Parkv, Tan, Viswanadha 1. Ratinale fr the prject The Apprach The Findings Alumni backgrund prir t switching t PE Prfiles and gegraphy f PE firms Mtivatins and challenges f mving int PE Rle f INSEAD in a PE career Advice t INSEAD students planning t mve int PE... 9 Exhibit 1. Questinnaire utline Exhibit 2. Sample and ppulatin distributin by vintage Exhibit 3. The Alumni Prfile Rbert Bindi, Permira Exhibit 4. The Alumni Prfile Melissa Heng, General Atlantic Exhibit 5. Glbal PE capital raised by fund type, USD billins Exhibit 6. Breakdwn f Institutinal Investrs in Private Equity by Lcatin References

4 1. Ratinale fr the Prject PE Research Assignment Paper Grup 9 Chen, Khamitv, Parkv, Tan, Viswanadha It is cmmn knwledge that breaking int the private equity (PE) industry is hard. The way in remains a mystery t many ptential emplyees. Yet given the sheer vlume f assets under management - $2.5 trillin acrss arund 4,700 firms PE is clearly a lucrative place t wrk. The chances f getting int PE are very small: an entry-level psitin typically attracts arund 300 applicatins 1 (a 0.3% chance f success). Cmpare that t the INSEAD acceptance rate f 20% (January intake) t 30% (September intake). 2 Of rughly 54,000 3 INSEAD alumni, mre than 1,000 4 are wrking in PE abut 2%. Anther estimate puts the percentage f INSEAD alumni in PE at 14%. 5 Regardless f which is crrect, clearly INSEAD alumni d better at breaking in t PE than average. Fr this reasn, ur research aims at finding ut hw INSEAD alumni make a career in private equity, and takes the view that any meaningful trends r takeaways will be useful fr current students r recent graduates lking fr an pening int a PE career. 2. The Apprach There were tw main parts t ur research: A. A survey f INSEAD alumni via t extract raw data (see Exhibit 1) via an nline questinnaire. We used the alumni database as f March 22, 2017 as the ttal ppulatin, which cntains 834 alumni wrking in PE. Over the curse f the prject, ver 600 INSEAD alumni were cntacted, and 86 respnses were received, which was ur sample. Survey participants came frm INSEAD vintages encmpassing ver 30 years (frm 1979J t 2015D), wrking in ver 30 cuntries. (The vintage distributin amng the verall ppulatin is given in Exhibit 2). Hence we cnsider the respnses t be representative f the verall ppulatin. B. Interviews with INSEAD alumni with significant PE expertise, hlding senir psitins in large and wellknwn PE firms. The gal was t create alumni prfiles that culd ptentially be placed n INSEAD s Glbal Private Equity Initiative (GPEI) website and used t prmte IPEC cnferences. Over the curse f the prject, tw interviews were held (anther was scheduled but pstpned). See Exhibits 3 and 4. 3

5 3. The Findings PE Research Assignment Paper Grup 9 Chen, Khamitv, Parkv, Tan, Viswanadha 3.1. Alumni backgrund prir t switching t PE The vast majrity f respndents did nt wrk in PE prir t INSEAD. Peple with prir experience in PE began t apply t INSEAD frm 2005, and had n average three years experience in the industry, cinciding with the s-called third private equity bm (after the LBO bm and bust in 1980s, and resurrectin f LBOs in 1990s when the dtcm bubble burst). Prfile f Switchers: Amng respndents wh did nt wrk in PE prir t INSEAD, we identified tw types: direct switchers, wh went int PE right after INSEAD (36% f respndents); indirect switchers, wh went t wrk in ther industries fr n average 3 t 5 years befre entering PE (64% f respndents). i) Typical prfile f direct switcher: 4

6 Direct switchers mstly wrked in cnsulting (38%) and finance and banking (31%), which suggests that a finance and cnsulting mix is a must t land jb in PE, as was cnfirmed by ur interviews with alumni. ii) Typical career path f an indirect switcher: Peple with a cnsulting backgrund (26%) mstly returned t cnsulting (ften spnsred students); thse frm a finance and banking backgrund (26%) als returned t that industry; almst 40% f peple frm ther industries (48% f respndents) switched t cnsulting right after INSEAD befre ging t PE. Peple with prir PE experience tended t wrk in mre senir psitins (partners, directrs) and retained thse psitins after INSEAD. 80% f respndents withut prir PE experience typically gt mre junir psitins (assciate/assciate directrs and belw). Currently, 95% f respndents hld senir psitins. Assciate psitins are held by 5% f respndents. This crrelates t their INSEAD vintage mre junir psitins are held by alumni wh graduated after

7 3.2. Prfiles and Gegraphy f PE firms INSEAD alumni wrk acrss varius funds with different prfiles: Cmpared t the level f capital raised ver the previus 14 years by fund prfile (see Exhibit 5), mre PE prfessinals frm INSEAD wrk in Venture and Grwth funds, which is cnsistent with INSEAD s fcus n entrepreneurship and cnsulting. Gegraphic lcatin is as varied as fund prfiles and is crrelated with the diversity f INSEAD alumni: This data is in stark cntrast t breakdwn f institutinal investrs in PE by lcatin, wh are mstly based in Nrth America (see Exhibit 6). This is largely explained by the fact that nly a small prtin f respndents wrk fr tp GPs (mst f which have their headquarters in Nrth America), and is directly related t INSEAD being based in Eurpe. 6

8 3.3. Mtivatins and challenges f mving int PE The mtives behind mving int PE include the fllwing: Amng the key challenges that respndents faced in their career switch t PE are: 7

9 3.4. Rles f INSEAD in PE career At which pint f their career did respndents decide t mve int PE: Even thugh the majrity decided t g t PE pst-insead, they fund INSEAD experience useful fr switching t PE: 8

10 3.5. Advice t INSEAD students planning t mve int PE Respndents pinpinted which areas that they wished they had learned at INSEAD that wuld have been useful fr PE (knwledge and skill gaps): The fllwing advice was ffered t current MBA students wh aspire t mve t int PE after INSEAD: i) Gain relevant experience Get experience in strategy and the industry sectr in which yu'll be investing. If yu are nt successful appraching PE firms directly, cnsider jining develpment finance institutins as plan B, which gets yu int the industry and psitins yu fr a further mve. G t a small-mid cap fund t learn mst and d sme pr-bn prjects. Cnsulting and investment banking are gd skillsets t btain prir t PE. Get relevant experience in M&A r transactin services befre applying. An INSEAD MBA is unlikely t be the nly reasn a PE firm recruits yu. Just as imprtant is relevant quality-specific experience in a given field r industry. If yu have this experience befre btaining yur MBA, then great, g straight t the PE shps. If yu d nt, then yu will need a stepping stne t mve frward. The three mst attractive stepping stnes are: cnsulting firms (Bain, McKinsey, etc.), crprate finance shps (IBs and Big 4s), and crprate industry leaders (Frtune 500 cmpanies). 9

11 Get enugh business experience first - at least tw t three different sectrs and a minimum f 6-7 years. D nt fcus exclusively n finance but als n all the human aspects linked t PE: management team assessment, peple management, understanding the drivers f CEOs and funders f small-t-medium-size businesses. Get an internship with a VC and gain practical experience in funding a cmpany prir t mving t PE. Relevant private equity advisry experience is essential. Demnstrate relevance t gegraphy, sectr r transactinal experience. Dn't g straight t PE: start in banking, cnsulting r industry t gain experience. Cnsider rles ther than investment prfessinal: there is a grwing trend f GPs structuring themselves with peratinal imprvement teams (creating value at the prtfli cmpany level) r investr relatins teams. ii) Gain relevant knwledge Take electives in negtiatin, finance, peratinal imprvement and family business. iii) Knw hw t market yurself and target the jb Jbs are rare s yu must be patient and learn hw t "tell yur stry" (why yu shuld d PE). Figure ut what type f PE yu want t d. Big LBO firms are a wrld apart frm small grwth firms. Decide whether it is PE r Venture Capital yu want t d, as PE requires slid finance knwledge while VC requires significant peple skills and a "feeling" fr technlgies and science. 10

12 Target the firms. Understand their hiring plans. Understand the philsphy f the fund and why yu fit. Understand the individuals and the strategy. Be stellar in yur CV, especially n academic achievements and specific hands-n experience. Be persistent and lk fr buyside rles in firms similar t PE (hedge funds, asset managers, family ffices) if cming frm the advisry side. Cntact the PE firms in yur target gegraphy directly. iv) Others Best t enter PE early as it takes at least 7-10 years t build a track recrd. Build yur netwrk and industry expertise. Netwrk - it s all abut timing. PE hires n an ad-hc basis and securing a jb in the industry is mre abut being in the right place at the right time. 11

13 Exhibit 1. Questinnaire utline 1. Basic Infrmatin First and Last Name: INSEAD Vintage: Current Cmpany: Current Psitin: Current prfile f the fund (buyut, venture, real estate etc.): Current Lcatin: 2. Prfessinal experience: Did yu wrk in PE befre INSEAD? If yes: a) Years f PE experience befre INSEAD? b) What was yur jb rle right befre INSEAD? c) In which cuntry did yu wrk right befre INSEAD? If n: a) In which industry did yu wrk right befre INSEAD? b) N. f years f wrking experience befre INSEAD? c) What was yur jb rle right befre INSEAD? d) In which cuntry did yu wrk right befre INSEAD? Did yu wrk in PE right after INSEAD? If yes: a) In which cuntry did yu wrk right after INSEAD? b) What was yur jb rle right after INSEAD? If n: a) In which cuntry did yu wrk right after INSEAD? b) In which industry did yu wrk right after INSEAD c) What was yur jb rle right after INSEAD? d) Hw many years pst-insead befre jining PE? 12

14 3. Mtivatin behind ging int PE When did yu plan t enter PE? Pre-INSEAD, INSEAD, Pst-INSEAD If Pre-INSEAD: a) Was INSEAD a part f the plan t PE? If yes, what did yu plan t gain frm INSEAD? If during INSEAD: a) What at INSEAD prmpted t mve t PE? If Pst-INSEAD: a) What prmpted yu t mve t PE? b) Was INSEAD helpful in switching t PE? Hw? c) What are the challenges yu faced in switching t PE frm yur industry? 4. Open-ended questins a) What are the skills, knwledge r experience yu wish yu had had during INSEAD that wuld be useful t switch t PE? b) What is yur advice fr current INSEAD MBA students wh aspire t mve t PE after INSEAD? c) Please prvide the names f ther INSEAD alumni wh are currently wrking in PE that we shuld reach ut t (ptential additins t GPEI alum database) d) Wuld yu be willing t be cntacted fr a further interview in the future? 13

15 Exhibit 2. Sample and Ppulatin Distributin by Vintage 60% 50% 48% 44% 40% 30% 32% 31% 20% 10% 9% 10% 10% 11% 0% 3% 0% 1% 1% 1960s 1970s 1980s 1990s 2000s 2010s Sample Ppulatin 14

16 Exhibit 3. Alumni Prfile Rbert Bindi, Permira Rbert Bindi MBA 01J Partner, Glbal Head f the Financing Grup at Permira Rbert Bindi is a Partner at Permira since Mr. Bindi als fcuses n the financial services sectrs. Since 2013 he is the head f Financing Grup and has wrked n a number f transactins. Befre jining Permira in 2001, he served as an Assciate at McKinsey & Cmpany, Inc. fr three years, where he wrked in the telecms practice. He was Directr f Sisal Grup S.p.A. frm 2007 and is a frmer Directr f EEMS Italia SpA. Mr. Bindi hlds an MBA frm INSEAD and a Degree in Chemical Engineering frm Plitecnic di Milan. Unlike mst INSEAD alumni, Rbert initially didn t plan t g t INSEAD but fllwed the advice f clleagues at McKinsey. I was perfectly happy with my career at McKinsey but after sme time mre and mre clleagues kept telling me: Yu shuld take a year ff and g t business schl. It s ging t be gd fr yur career and it s ging t be gd fr yur life. I didn t want t g. Why wuld I want t waste ne year and nt keep ding my jb? Eventually I fllwed the advice frm a partner at McKinsey and decided t g t INSEAD as it was a shrt prgram. I definitely wanted t g back t McKinsey. I didn t d jb interviews during recruiting perid at INSEAD. I was a walking McKinsey advertisement, in cntrast t many ther cnsultants wh wanted t change careers r becme entrepreneurs. I am a chemical engineer by educatin and I started t learn new things in McKinsey but I didn t knw hw t read financial statements, didn t knw much abut accunting r banking, s I fcused all my curses at INSEAD n finance. In cntrast t mre traditinal pst-insead career path when peple typically wrk fr 2-3 years at tp cnsulting firms and then mve t ther industries, Rbert started career in private equity right after INSEAD and already had 3 years f cnsulting experience with McKinsey & Cmpany wrking in Italy and Israel in the Telecms practice. Getting int private equity was thanks t mix f serendipity, entrepreneurship and risk-taking. In February 2001, I gt this weird invitatin resulting frm a CV screening. The cmpany was called Schrder Ventures. Back then private equity was really private there was nthing t 15

17 research: n data, n benchmarks, n returns. I knew nthing abut the cmpany. I went t the meeting and I liked the team, I liked the Head f Italy. Fr me it was a gd pprtunity, a perfect mix f finance, cnsulting and pprtunity t live with yur decisins. I wuld say that my level f preparatin fr private equity back in 2001 wuld be nt enugh t jump the hurdle tday. Permira was funded in 1985 by Nichlas Fergusn, initially perating a number f businesses acrss multiple gegraphic regins under the umbrella f the Schrder Ventures brand. In 1996, the cmpany s UK, France, Germany and Italy units merged their peratins t frm Schrder Ventures Eurpe, and a year later launched the cmpany s first Pan-Eurpean fund. Rebranded Permira in 2001, it has since expanded its peratins internatinally, grwing t becme a leading name in the private equity investment sectr. When I jined Permira in September 2001, fr the first time the benchmark infrmatin and data n the invested funds was published in the Financial Times. It was cnsidered revlutinary because yu started t get much needed transparency. I went t wrk the first day at Permira even withut a cntract. I let my ffer t McKinsey expire. They did it n purpse they wanted t see whether I wuld be willing t take the risk. Of curse, we dn t d that anymre nw! The skills and cmpetencies needed t wrk in private equity have changed. As the industry has becme mre develped, the fcus is n candidates with mre specialized expertise and a less generalist apprach. Frm day ne I was wrking n a prject that was related t my chemical engineering backgrund. Permira s structure has always been very flat and I started in junir psitin under the wing f the head f Italy. The ffice was very small there were nly arund 5 peple. It was like wrking fr a clckmaker r a pian crafter: yu g int the shp and yu learn n the jb, learn hw t perfrm financial due diligence, legal due diligence. Nw we have mre frmal training fr the newcmers, but it is still learning n the jb. The industry is much mre researched and ur candidates plan t g t private equity well ahead and are usually well versed in ne r tw sectrs fr which we hire. When we hire junir peple withut specific links t the sectr, they wrk n prjects with generalist functins fr the first year and then we let them decide which sectr they want t wrk with. 16

18 While knwledge and expertise f the particular sectr is helpful t get a jb in private equity, it is nt enugh t be successful in yur career several years dwn the rad, when the entrepreneurship angle becmes mre and mre imprtant. I was hired in part based n my experience at McKinsey and expected t be fluent n the telecm markets side. After a few years, rather than staying fcused n a less attractive subsectr, I cntributed t business develpment and was ne f the partners that funded he Financial Services divisin at Permira. Yu need t find yur way, yur wn platfrm, things that yu like, whether it s riginatin r executin. Yu need t find hw yu can help the firm, hw yu can create partnership ecnmics n a glbal level. The industry has changed a lt. Candidate prfiles and appraches t recruiting that wrked fr private equity as a yung, unresearched industry back in 2001 wuld nt be as effective nw. The reality nw is that my CV f 2001 wuld be prbably OK fr appraching private equity but nt a striking ne. That s because I was 100% cnsultant, even thugh I had a great track recrd at McKinsey and internatinal experience, but that was abut it. Unfrtunately, the first impressin cmes frm the CV and the bar is much higher nw, cnsidering hw visible and attractive private equity has becme. Yur CV needs t be spectacular. The thing that jumped ut frm my CV was that in my last 6 mnths at McKinsey, while I was junir assciate there, I pened an ffice in Israel and did a lt f due diligence n the venture capital firms prtflis there. But that is nly part f what it wuld take nw t becme ne f the Assciates at Permira. What I lk fr is a specific experience in private equity transactins: whether yu are banker, cnsultant r an accuntant. What have yu dne in yur previus career in direct relatinship t PE? What are yur specific applicatins f skills? What can yu bring t the table knwing hw the private equity industry functins nw? The secnd imprtant thing is what I call being multi-vertical. Being a banker r a cnsultant is nt enugh; in additin yu need t be a specialist in an area that fits very well with ur strategy. Back then we were just a netwrk f lcal generalist ffices, but times have changed and we nw have a fcused sectr strategy. Our investrs are much mre specific in what they want and we are much mre specific in what we deliver. Therefre, we need very specific skills. The bar has mved fr everybdy, nt nly fr candidates, but als fr us because investrs can get better deals frm fcused investrs rather than frm generalists. 17

19 We are very pragmatic. We wuldn t hire just cnsultants but cnsultants with crprate experience, hands-n experience with cmplex prjects, internatinal experience. My career prir t Permira didn t invlve just cnsulting; I wrked in the il and gas divisin f General Electric fr ne year under McKinsey. The next year I wrked n a launch f a telecm carrier in Italy. There were 30 peple in that cmpany when we started the prject and when we left it was number tw player in the telecm space. It is that experience that enabled me t psitin myself as a prfessinal with hand-n experience in strategy at Permira, even thugh I was a cnsultant. The challenges that need t be vercme t break ut t private equity and t Permira, in particular, are significant. We have a seasnal business in a sense and yu need t be the right persn reaching ut at the right time. We typically hire mre peple as we ramp up ur new fund. All the partners have their wn hiring plans and typically when ur investment capacity ges up, ur hiring capacity als ges up. We always run prfessinally-led hiring plans and rarely d hiring by urselves except fr interns. Internship is smething that we started ding nt a lng time ag: we d a rad test with that persn fr 3 mnths, bringing him r her t an actual deal. If a candidate stands ut and there is a match with a hiring seasn, then we mst likely give that persn preference ver ther candidates. We als need a perfect match between skills and ur strategy. If yu are fluent with the market and stand ut in riginatin, mst likely we already knw yu. If yu are an utstanding cnsultant, then mst likely we already have wrked with yu. In additin, we want peple that did their due diligence n us. First, we want t understand hw much peple care abut the jb. Secnd, we want t be sure that they knw what are they getting t. Private equity is a lng-term career and yu need t apprach it n an extremely cnscius basis. Why wuld yu want t wrk fr Permira and nt Blackstne, fr example? Say, yu have experience in cnsumer gds and that s ne f the sectrs Permira invests in and yu think yu can d smething fr us in this sectr. The ability t fit persnally is key here. T build a successful career in private equity ne must vercme yet anther set f challenges. T be successful, the key element is t be a real entrepreneur. At Permira nbdy tells yu exactly what t d. Sme peple get paralyzed by that fact. Fr example, in banking yu cme t ffice in the mrning and yu knw what will yu d exactly. At Permira, yu are n yur wn: yu interact with 18

20 yur advisers, yu d yur wn due diligence, yu decide whether yu want t stay up all night at the ffice r whether yu need t take a flight t have face-t-face meeting with the target cmpany executives. It is this level f independence. Yu create yur wn agenda. That can be exhilarating r nt, depending n what kind f persn yu are. We all carry ut tasks fr the team and results is what peple fcus n. Yu get judged by whether yu can rll up yur sleeves and d the wrk, whether yu are careful t details, whether yu can make a sale t the management team, whether yu are empathetic. Yu need t have all thse things and that is difficult. Yu culd be a genius and never make partner if yu culd nt interact n a persnal level and had zer empathy. The mre senir yu get, the less specific tasks yu have yu need t find the deals and get deals t wrk. Accmplishments Yu are Prud f Permira nw has five sectrs fr investments. We had three when I jined. One f the tw sectrs that we decided t fund started with me asking a questin t a small grup f peers: What wuld happen if a private equity firm wned a bank? It tk us fur years t develp it since We started analyzing pprtunities, educating urselves, educating ur investment cmmittee. It was fur f us, I wasn t partner myself at the time, and we cnvinced the whle partnership t invest in a new sectr, t hire mre peple. We started in 2009, in the middle f the crisis, and almst immediately made the first the deal. Peple tld us that we d be dead befre lng. In reality, the crisis started t shake up sme lucrative assets. By the end f 2016 we d invested ver 20% f ur equity in the last 18 mnths thrugh that sectr. The secnd thing I am prud f is the fact that I started as a strategy cnsultant at Permira and I am nw the Glbal Head f Financing, which is a mve acrss pretty much perpendicular dimensins. I did s by learning and ding things n the jb. I am prud that nw we have a glbal financing team f 15 peple wrking efficiently. We wuld beat the Permira f five-ten years ag just by being able t rganize ur financing much quicker and n mre cmpetitive terms. I came t Permira nt knwing what financing was and nw have glbal respnsibility fr the fund. That is what I mean by being entrepreneurial. Advice t INSEAD Students First, understand the industry. Becme knwledgeable abut the players, abut their differences, and then pick yur targets. We can see immediately when smene is spraying CVs like a machine-gun at different funds because they are all the same t this persn. Yu need t be very cnsistent 19

21 in applying t a limited number f firms and cnvince a cmpany t pick yu. S pick yur battles carefully. Secnd, interact with peple. Find a persnal pint f attachment. We are reachable. Use the alumni netwrk. Peple will talk with yu: they we INSEAD and I we INSEAD. INSEAD is why I am here at Permira. Third, make yur CV utstanding. If yu are a cnsultant yu need t plan fr 2-3 years. Yu want t have private equity-related experience n yur CV. Make a perfect match fr private equity with yur skills and experience. Having bth banking and cnsulting experience is a glden cmbinatin that may get us interested in yu. All f the abve are the ways t get yu an interview, nt t land a jb. During the interview, it is imprtant t understand that it is nt necessarily a technical interview, there are n standard tests (yu will have them later n). I want t understand what yu have dne, but I als want t understand what kind f persn yu are because this is at least a 10-year career path. If yu g ut f the fund in year 2 alng the race, it will be a tugh sale. 20

22 Exhibit 4. The Alumni Prfile Melissa Heng, General Atlantic Melissa Heng MBA 11 J Vice President, General Atlantic As ne f the funding members and the first lcal hire f General Atlantic's Suth-East Asian ffice, Melissa jined GA right after INSEAD, and has been wrking fr GA fr ver 5 years. She is respnsible fr the riginatin and executin f investment pprtunities in Suth-East Asia acrss sectrs with a fcus n Internet & Technlgy and cnsumer-facing businesses. Prir t INSEAD, Melissa wrked as a crprate finance lawyer at the law firm Drew & Napier in Singapre where she advised clients acrss Asia. She then jined Macquarie as an investment banker fcusing n capital markets and M&A transactins in the telecmmunicatins, media, entertainment and technlgy space in Singapre and the Middle East. At INSEAD, Melissa was President f the Investment Management Club, which managed the fund allcatin f INSEAD. She hlds a Bachelr f Law (Hns) frm King's Cllege Lndn. What brught her t GA? - Right time, right place, and a lt f hard wrk. GA reached ut t me thrugh INSEAD Private Equity CV bk when they were pening their ffice in Singapre. I didn t have a traditinal backgrund because I started ff in law and then mved t investment banking befre ging t B-schl. Being actively invlved in the Investment Management Club helped develp and shwcase my interest in investing. She recgnized that students needed t put in mre effrt t get int investment after INSEAD because private equity recruitment in Suth-East Asia tended t be ad-hc and unstructured (unlike in the US), with firms recruiting nly when they have resurce needs. Being a Singaprean, Melissa was able t leverage her lcal netwrks in the regin t secure ther ffers befre graduatin, befre finally accepting the ffer frm GA. It s really abut which funds are hiring at that pint f time. S that s a bit f luck, a bit f hustle, and yu need t cnstantly be talking t peple in the industry t find ut if there are any events that signal ptential recruiting (e.g. new funds being raised etc.). Why PE after INSEAD? 21

23 - Knwing what yu are nt interested is as imprtant as knwing what yu are. When evaluating career ptins, fr Melissa it was very imprtant t nt spend time n what she knew she didn t want t d. It is easy t hp n the bandwagn when many f yur classmates are interviewing fr cnsulting and investment banking jbs. Time spent preparing fr cnsulting case interviews can be better spent n industry netwrking r develping yu investment skillset. Yu need t knw what yur strengths and weaknesses are and where yur interests lie. Yu generally need t be an all-runder t succeed in PE. Yu need t have peple skills t interact with entrepreneurs, but yu als need strng analytical and technical skills fr business analysis and financial mdelling. What she enjys ding at GA? -Learning new business mdels and meeting interesting entrepreneurs, particularly in her fcus sectr. In GA, everyne is encuraged t specialise in a sectr. Melissa fcuses primarily n internet & technlgy fr riginatin, an industry that she is passinate abut. I really enjy lking at the new business mdels cming up (frm the sectr) all the time. I ve seen the evlutin f tech frm being a nn-existent sectr in SEA t the bming sectr that it is tday, and it s really exciting t be part f that and t fllw these entrepreneurs n that jurney. On the ther hand, the lean setup at GA in Singapre als allws Melissa t lk at deals acrss ther sectrs, which she enjys because it allws her t develp perspectives n different business mdels and n hw technlgy can add value t cmpanies perating in thse traditinal industries. What are the challenges? -Right cmpany, right deal, right size. The main challenge Melissa faces is t find the right deal that fits GA s check size, which is n average between US$ millin but can range between US$ millin fr a minrity stake. It is especially challenging in SEA, since there are nly a handful f cmpanies that have a prven business mdel, are grwing fast, and are able t absrb such a large amunt f capital and they tend t be highly valued r dn t require capital. I feel it s (t find a deal) a lt f like finding the right jb. It s abut building the right relatinships thrugh varius channels, and psitining urselves s that when the entrepreneur des require capital, we are tp f mind. 22

24 In additin, having a relatinship f trust with entrepreneurs is als critical, and investrs need t spend the time t cnvince entrepreneurs f the nn-mnetary value that the fund can bring t their business. This prcess can take anywhere frm a few mnths t up t a few years befre the actual investment is made. Because we are minrity sharehlders, we are nt in a psitin f cntrl and s there needs t be trust that the entrepreneur is ging t d the right thing as a partner and vice versa. The entrepreneur needs t trust that we will bring real value t the business nce we invest. And it takes time t build up the trust. Advice t INSEAD students wh aspire t wrk in PE - Slid financial mdelling + Passin fr investing + Gd interview preparatin Firstly, ne shuld definitely be prficient with financial mdelling, which is required by mst f the glbal PE firms. Generally, students withut any srt f financial backgrund will usually struggle with the technical case study. Just like fr cnsulting interview preparatins, have ne f yur classmates with an investment backgrund help yu thrugh a typical investment case, and just keep practicing until yu get it right every time. Secndly, prepare thrughly fr any ptential questins and knw yur transactins. Melissa pinted ut sme red flags during interviews: e.g. sme students, when prbed abut past deals they have dne, are nt able t talk thrugh the transactins frm the perspective f an investr. A great investr, frm Melissa s perspective, has strng strategic and business acumen, in additin t slid technical skills. Thirdly, be genuinely passinate abut the industry. Nt being well prepared fr interviews reflects prly n ne s level f passin fr the industry and general wrk ethic. Yu need t ask yurself Is it smething that I am really passinate abut and can see myself ding fr a lng time? That s the difference between having a career versus just anther jb. 23

25 Exhibit 5. Glbal PE capital raised by fund type, USD billins Surce: Glbal Private Equity Reprt 2017 by Bain & Cmpany, page 9, accessed April 16, 2017, 24

26 Exhibit 6. Breakdwn f Institutinal Investrs in Private Equity by Lcatin Surce: 2016 Preqin Glbal Private Equity & Venture Capital Reprt, page 50, accessed April 16, 2017, 25

27 References 1 Paul Clarke, Hw t get thrugh private equity interviews, August 6, 2016, 2 INSEAD - Admissin Trends Over 5 Years ( ), gmatclub.frum, accessed n April 16, 2017, 3 INSEAD alumni cmmunity page f INSEAD fficial website, accessed n April 16, 2017, 4 INSEAD Private Equity Club web-page, accessed n April 16, 2017, 5 Paul Clarke, The tp 35 MBAs fr getting a jb in hedge funds, private equity and asset management, August 18, 2016, 26