Everyone knows that moving from investment banking to private equity isn't easy: private equity funds hire very few people and are notoriously fussy. Junior bankers, are eager to work in private equity and they apply to the industry in droves. The result is that private equity applicants far, far outnumber private equity opportunities.
However, there are some people that private equity funds are particularly keen to hire: diversity candidates, particularly ethnic minorities. The private equity industry has a well-publicized issue with homogenous staff and wants to do something about it. Some private equity firms, like Blackstone have started their own graduate recruitment programs (Blackstone's has 150 people chasing each role) to generate their own staffing pipelines rather than hiring from banks' own non-diverse junior ranks. Others are interested in what minority bankers can add to their teams.
Rohan Arora moved to the buy-side after graduating in economics and management from the University of Oxford and spending 18 months at boutique investment bank Evercore. He's worked for a London private equity fund for three years and is passionate about helping more minorities into the industry.
“Diversity is super-important to buy-side firms: the industry needs diverse talent to help it make investment decisions and to spot opportunities that non-diverse teams might miss,” says Arora. “Diverse teams can help make better investment decisions. One of the things the industry has really seen is that the markets where people are looking to invest now - areas like consumer and healthcare, have very diverse management teams. The investing industry needs diverse investment teams in response.”
In America, the private equity industry has established levers to pull as it attempts to increase its intake of ethnically diverse talent. - SEO USA, the organization that helps Black, Hispanic and Native American college students into underrepresented careers, began an alternative investments arm in 2009 and runs a conference and a fellowship program. This year's conference in March already has speakers lined up like Ken Griffin of Citadel, Verdun S. Perry, a senior managing director at Blackstone, and Dawn Fitzpatrick, the chief investment officer at Soros Fund Management.
London, however, has none of this. “London’s a bit further behind the U.S – but we’re catching up,” says Arora. As a former member of SEO London's advisory board and mentor to students and bankers who want to move into PE, he's among those pushing for change.
“Having a mentor is really helpful when you’re moving into private equity," Arora says. "The private equity recruitment process is very complicated and every year the bar gets higher and higher as firms expect more. When a private equity firm hires you it wants to see that you already have an investment mindset and are thinking about upsides, risk and returns, and how you can add value to a business.”
How do you find a mentor who can prepare you for a private equity application? Arora says there are three main routes: "Use your alma mater to find people already in the industry, engage with diversity organizations like SEO or Diversity Venture Capital, and reach out to people." When you're doing the latter, he says it helps to explain why you're connecting with that person in particular: "Look for people whose investment style you like and who you can connect with."
Arora says it's important for those already in the private equity industry to mentors others who are starting out: "I always endeavor to connect with those who reach out to me, and believe support networks have been and continue to be a key contributor to my success.”
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