Overview

Congratulations on successfully navigating through the competitive banking / consulting recruiting processes! Now, it's time to climb the next rung of the prestige ladder: 'The Buyside.' 

Buyside recruiting includes all of the fun of banking / consulting recruiting with FOUR key differences: 

1. Oncycle / Offcycle 
2. Headhunters
3. Model Tests / Case Studies (see other pages for strategy-specific detail)
4. Speaking About Deals

Below, I will walk through the timelines you must know and the steps you must follow to secure a seat at an investing shop. 

The money is better on the Buyside (Source: High Yield Harry)

Oncycle vs. Offcycle

The terms 'Oncycle' and 'Offcycle' mostly applies to private equity recruiting. For PC, HF, VC /GE recruiting, it's mostly an 'offcycle' process. However, the majority of you are likely coming from banking seats looking to move into private equity after your analyst stint.  

Oncycle: 

• The Duration of the Process-- In 2024, oncycle recruiting kicked off in the last week of June. For most analysts, they had just started their IB training programs. Oncycle lasted about a month and is mostly geared towards MFPE (Mega-Fund Private Equity) recruiting. Think Apollo, Blackstone, CD&R, etc. Some large private credit shops like Ares also participate, but 90% of oncycle processes are strictly for private equity seats at the largest, sweatiest funds. Oncyle is mostly geared towards first year analysts, maybe some second years
• The Interview Process---Oncycle recruiting is the fastest way to get an offer. If you do things correctly, you can have an offer 2 years before the job starts. This allows you to take the foot off the gas a bit during your banking / MBB consulting stint
  • During oncycle, you may have a coffee chat or two and are then immediately brought into the office for a Superday which can be over 4 hours long. These interviews may happen between midnight and 4am as firms race to lock up the strongest talent. Shortly after, you'll be given an offer or rejected. You can engage with oncycle and secure an offer within a week. Interviews are centered around a). deal experience and b). your technical ability
  • No one really has tangible deal experience to discuss so you need to leverage your internship to spin pitches to sound like deals. At this stage, interviewers know you're bullshitting so don't make up a crazy lie. They're really just trying to test your knowledge of transactions and how you think about the different key elements: valuation, transaction price, parties involved, synergies created, etc (see below for detail around how to walk through a transaction)
  • Regarding technical ability, you'll be thrown standard banking technicals. So, brush up on your accounting, valuation, and merger math. However, a twist here is that there is a much heavier focus on your knowledge around LBOs and PE value creation strategies. You'll also definitely see an LBO modeling test (we discuss this further here: Private Equity Recruiting | Buyside Associate Recruiting). At the bare minimum, you'll need to walk through a paper LBO. Similar to banking, if you get anything wrong you'll probably be cut from the process
• Merits of Oncycle---If you have always known that PE is what you want to do, then oncycle is for you. Within a few short weeks of recruiting, you can lock up your dream job at the most prestigious funds 2 years in advance. You also won't have to worry about juggling recruiting with your full-time banking analyst stint (tbh as hybrid working policies fade it's going to be very difficult to recruit). These funds pay top of the Street ($140k+ associate base, 50-100% bonus). You'll work alongside some of the smartest, most cutthroat people in finance and work on the largest LBOs 
  • You need to be very convinced that sweating in MFPE for at least 2 years after your banking stint is how you want to spend your early 20s. If you have any reservations, I'd advise you NOT TO PURSUE ONCYCLE   
• Cons of Oncycle--Creates FOMO and is an easy way to act like an idiot in front of headhunters and funds if you're not ready. More on headhunters below. Do not chase after a job if you don't know that you want it. If you're not ready, it will show when speaking with headhunters and interviewing at funds. These headhunters will blacklist you from future opportunities if you're being a tourist in the oncycle process. Also, tell me I have unc status or whatever but locking up a job 2 years in advance will make you pretty unmotivated to try at your current job--one which you should be trying to learn everything you can get your hands on
  • Many people pursue oncycle for the wrong reasons--namely the hunt for prestige. Short story, no one cares where you work, how long you work, or how much money you make after 2-3 years in your career. In fact, you likely won't even be connected with the same 10-20 people you've been benchmarking yourself against throughout highschool / college
• History of Oncycle--Oncycle has moved earlier every year. About 5-10 years ago, oncycle started AFTER your first year as an analyst. As oncycle has moved earlier, fewer funds have participated. Oncycle today is a much smaller force within the Buyside recruiting sphere.  

Offcycle: 

• The Duration of the Process--From the point oncycle wraps up -> promotion to associate 1. Around 85% of Buyside seats are offered during the offcycle process. There are also far more firms and strategies that recruit throughout the offcycle. PE (MM, LMM), PC, public credit, HF, VC / GE all recruit throughout the offcycle 
• The Interview Process---Similar steps to oncycle, but interview processes can be dragged over months with some firms having 10+ rounds of interviews. Most processes take at least a month, maybe two depending on the firm's capacity / need to recruit. The usual cadence is 1-3 coffee chats, a case study, a case study debrief, and a superday (mostly behavioral). Interviews typically take place during the week. Be sure to have a rolodex of excuses to leave work / take a day to WFH (examples of excuses towards the bottom of the page). YOU ARE ON THE FIRM'S TIME. Just like oncycle, the interview process is centered around a). deal experience and b). technical ability (there is also a stronger emphasis on cultural fit for offcycle recruiting)
  • For offcycle recruiting, interviewers want to know about the deals you've worked on (see below for information about how to walk through a deal). The bottom line is that you need to be intimately involved with every detail of the transactions you've worked on and listed on your resume. You also need to demonstrate the ability to think like an investor. Was it a good deal or bad deal for the parties involved? 
  • On the technical front, you will have a modeling test. You'll either be invited in-person or be provided with a case to complete over a few hours / days where you will literally open up excel and bang out a model (LBOs if you're looking for PE or traditional PC seats). Then, you'll debrief your model with the team. If you get the model wrong, you won't get the job. We have a bunch of models for you to practice with when you become a Premium Subscriber. These are REAL case studies provided from all types of funds across PE, PC, HF, and VC / GE (you won't find value like this anywhere else, most modeling courses cost ~$500 - $1,000)   
• Merits of Offcycle---You can take time to really think about the fund / strategy you want to work in. You can leverage tangible experience gained as an analyst to determine the parts of finance you like and hate the most before deciding to take another step in your career. You can also get a better idea of the people you'll be working with to see if you're going to a sweatshop or not---cultural fit becomes increasing important as you age in your career
• Cons of Offcycle--It's incredibly time consuming. Interview processes last forever and you'll need to miss work to interview. This leads to more work building up and virtually all free time consumed by recruiting and working. Also, case studies / model tests provided during offcycle are significantly more intense then oncycle because you're on the firm's time. They want to invest in finding the right person and they want to make sure you can hit the ground running    

HeadHunters

A huge difference between banking and buyside recruiting is the involvement of headhunters. The 'Big Four' of PE recruiting are attached below: 

Headhunters are a necessary evil in the recruiting process. They're paid by the firm to find the best talent.

They do this by playing a volume game---emailing the same opportunities to different groups of candidates across the Street they deem to be the most qualified. However, through your own pipeline you'll likely only see 15% of the total available opportunities. Remember, they work for the firm, not for you! Their job is to place the right people quickly so they can get paid (average placement pay = 25-30% of the first year salary for the role they place someone into).

Their job IS NOT to coach you or help you with interview prep.

• The Timeline of Headhunters--They will find your school or work email after a few weeks into your analyst stint. Will then send you opportunities for as long as you stay in finance (most firms place candidates up and down the ladder of juniors -> seniors). Let's say a headhunter sends you an opportunity you like; you'll have a preliminary call with them to learn more about the Fund. If they think you're a good fit, they'll send your resume off to the firm. If the firm likes you, they'll ask the headhunter to schedule an interview. It's a match! You'll send times to the headhunter with your availability over the next two weeks and they'll correspond with the Fund. Only then will you finally chat with someone at the Fund. After a few first round chats, you'll be given a case study---this is typically sent to the headhunter and then sent to you. When completed, you'll typically send it back to the headhunter for them to send back to the Fund. If you killed the case, you'll then have a model debrief and Superday scheduled through the headhunter. If you kill the Superday, you'll get an offer and the headhunter will call you to double-check you're committed to this offer. After accepting the offer, they'll probably start asking if you're interested in public markets investing opportunities after your 2-3 year associate stint---the wheel never stops spinning
• How the Headhunters Work--After a few weeks into your analyst stint, headhunters will find your school or work email to pipeline you opportunities and get a picture of: the group you work in, the deals you've worked on, the type of strategy you want to move to next, the size of the firm you want, and the geography you're looking to work in. Any conversation you have with a headhunter is an interview. To get this information from you, they typically set up Zoom 'coffee chats'---this is a screening round. Next, they'll share opportunities with you that try to match your specified criteria. As I said, they get paid for placing you. If they think you're a good fit for private credit in Dallas, then they'll send you that opportunity. Unless your preferences genuinely switch throughout recruiting, DO NOT entertain opportunities outside of your specified criteria (see below what to say to headhunters). All said and done, you'll walk away with days of coffee chat experience, which is pretty good interview experience
• What to Say to Headhunters--You need to be very clear in what you want or else they won't send you the best opportunities. Say something like: 'I want to work at an UMM PE fund in NYC ideally investing within the tech sector' vs. 'I'm open to PE or hedge funds and think I'm interested in the East Coast but not totally sure yet. Also, I don't have a sector preference.'  
  • DO NOT try to go the side door by scheduling networking calls with random associates and principals at the funds you want to work at--especially for oncycle recruiting. They hire the headhunters to handle this step and may even blacklist you for being tacky
• Merits of Headhunters--No more cold outreach / endless LinkedIn messages needed. I hated networking for my banking internship--it sucked and I felt like an idiot. The fact that I no longer needed to do my own boots on the ground networking for the Buyside made the process much more tolerable. Speaking with headhunters is also good interview prep. They'll ask you standard questions such as: 'walk me through your resume,' 'tell me about a deal you worked on,' 'why do you want to go into an investing seat?' These are all questions that will likely arise in your actual interviews with Funds. Check out our Mock Coffee Chat Feature to practice your responses to these questions (more to come here. stay tuned)!
• Cons of Headhunters--They work for the Funds, not for you! Also, a frustrating aspect of headhunters and a huge reason why we created 'Buyside Associate Recruiting' is because headhunters control virtually every single Buyside interview process. It is very likely you'll never even get the chance to interview at Apollo because the headhunters controlling that interview process just didn't think you'd be a good fit...regardless of whatever preferences you gave them. Despite how many headhunters you'll connect with, you may only ever see about 15% of the available Buyside job market through your own pipeline. That's why 'Buyside Associate Recruiting' is such a great resource. You now have visibility into EVERY SINGLE PROCESS and can make sure you pounce on the opportunities you want      

Model Tests / Case Studies

A huge difference from the banking / consulting undergrad recruitment processes is that for Buyside seats across PE, PC, HF, and VC / GE you'll need to pass an Excel modeling / case study round. This typically falls within the middle of any given recruitment process and is similar in nature to banking technicals or consulting case studies where you CANNOT get anything wrong. If you get something wrong, you'll be cut from the process. 

Our strategy-specific write ups here:

Private Equity Recruiting | Buyside Associate Recruiting

Private Credit Recruiting | Buyside Associate Recruiting

Hedge fund recruiting | Buyside Associate Recruiting

Venture Capital and Growth Equity Recruiting | Buyside Associate Recruiting

Funds want juniors to be execution animals. If you can't model, they don't want you. Your core responsibilities will include modeling and putting together information for an investment memo. The sad reality is that your ability to accurately model is valued 10x more than your unique insights or general grit---this is simply because accurate modeling is much easier to measure when you're only meeting someone for a few hours prior to giving them an offer!

The good thing is that we have over 15+ real case studies selected from premier private equity, private credit, L/S hedge funds, and venture capital / growth equity firms. These practice cases and their answer keys are warehoused within our 'Premium Subscription.' For only $300, you'll be able to land a job paying $200K in your first year with potential for a 7-figure career. That's a 67,000% return and likely the best investment you'll ever make!

Regardless of the strategy, the nature of the modeling tests are very similar: 

• Timing: Anywhere between 30 minutes -> 5 days. Most timed cases will be in-person or proctored lasting anywhere from 30 minutes -> 4 hours. Take home cases are typically provided towards the end of the week to provide you with a full weekend to grind. The general rule of thumb is that the more time you have, the deeper in detail you have to go, and the more work you'll have to do. There is no free lunch here
• Material: An excel model and sometimes an investment memo / presentation. Will include a separate debrief with the interviewers after completion
• Format: You'll be provided an investment prompt, management deck, or sometimes just a bunch of 10-Ks to input investment information and assumptions onto a templated model or blank excel

Walking Through Deals

Snapshot ^ from Exec Sum

Another critical component of Buyside recruiting is being able to succinctly walk through a deal you've worked on. Your deal / project experience is the only work experience anyone will want to chat about during an interview and everything you've worked on is fair game for discussion; so you better know the details. It can be as broad as just describing the highlights of a transaction in a few bullets to being asked to recall what 2022 revenue looked like. 

Rule of thumb is to know at least every deal on your resume front-back. To be safe, you should also know the details of at least one other 'off-resume' transaction in the event your interviewer is being a dick and asks: 'tell me about something you've worked on that isn't on your resume.'   

When you walk through a deal during an interview, your response should be 1-2 minutes and it should cover: 

1. The transaction size, parties involved (be vague here to be cautious), and the type of transaction
2. Whether it's a good investment or bad investment  
3. 2-3 merits of the transaction
4. 2-3 considerations
5. 2-3 risks and mitigants

An Example: 

"I recently had the opportunity to work on a sponsor's $2bn purchase of a B2B cybersecurity SAAS business. This particular company sells encryption services to financial institutions across the US so that only the right people are able to view certain files. 

I think this was a good investment from the sponsor's perspective because they were able to purchase this business at a 10x LTM EBITDA multiple with 70% debt yielding a projected IRR of 32% by year 5. 

A couple of key merits of this transaction are: a). the $50mm of annual FCF generation of this business to repay debt, b). the low purchase price of 10x LTM EBITDA in an industry trading at 13x median multiples, and c). the sponsor's proven track record to create value for B2B cybersecurity SAAS businesses. 

A large consideration here is that the cost to acquire new clients is enormous given that the primary customer base consists of heavily regulated financial institutions. This could inhibit the business's ability to grow rapidly.

A few risks of this transaction include: a). reputation risk and b). an incredibly competitive industry.

Regarding reputation, a CrowdStrike-esque outage would significantly impair their ability to maintain existing customer relationships and attract new business. As a mitigant, the Company spends $20mm per year to execute its 10-step internal risk management framework to ensure its able to serve customers at all times with the proper information. 

Regarding the competitive landscape, B2B cybersecurity is incredibly competitive with large companies such as Virtru dominating the non-FI customer base and financial institutions looking to build out their own encryption services in-house. A mitigant here is that the Company locks up financial institutions for 3-year contracts to generate predictable cash flow and has a patented IP on its core encryption process to retain its ability to compete."  

What NOT To Do

1. Never reach out to investors directly. The headhunters control the recruiting processes (some really small shops may be the exception here)
2. Never talk shit about your current / previous job
3. Never disclose unannounced deals you're working on
4. When you get an offer, do not tell anyone until your background check has cleared and you're planning to leave ASAP (ie don't tell the entire team you accepted a PE offer two years in advance)
5. Do NOT pursue the buyside merely because your peers are. You're independent, make your own judgement based on what you want to do

Best Excuses to Interview

• Doctor's appointment (valid 3-5 times a year)
• Maintenance guy to fix something in your apartment (good ~3 times a year)
• Call out sick (good up to ~5 times a year)
• Meeting with a wealth advisor (good 1 time a year)
• Long distance relative / friend in town (good up to 2 times a year)
• Take time off / vacation days (whatever your company policy allows)

What to Wear

For guys, all you really need is your standard work wear. Button down shirt (white or powder blue), suit pants, and standard office work shoes (avoid sneakers). I'd say jackets and ties are totally optional and branding doesn't matter at all. No one is paying attention to whether you're wearing Jos. A Bank or Ferragamo; so just wear what works best for you.

From personal experience, I lowkey got clowned every time I wore a tie to an interview, so I've sworn off ties for the rest of my life. If you like ties, wear them. Today, it's definitely not the standard. 

For women, match the same vibe. Just wear whatever you'd wear to work. I unfortunately am a guy who does not know the exact women's wear terminology or brands. So, apologies in advance for the lack of detail here.