I’m in the final round for an interview with a family office PE firm, super small. The last interview seems to be wrapping everything up and won’t generally be a super technical interview, at least is what they told me.
Given that I am offered the job, I’m curious about others who have made this transition. What we’re some of the challenges you faced and what’s some advice you have for me to best prepare for this position?
I know financial modeling is a huge part of the job. I’ve seen a few in my job and also worked in one from one of the first rounds of the interview. Im wondering if that will be a big adjustment, or if having FDD excel experience will make it an easy learning curve?
Any advice or discussions would be appreciated, thanks all!
Based on the WSO threads discussing transitions from Big 4 FDD to PE, here are some insights and advice for your upcoming move to a small family office PE firm:
Adjusting to a Smaller Team: Transitioning to a smaller firm often means you'll be involved in a broader range of tasks beyond just financial modeling. This can include deal sourcing, due diligence, and portfolio management. The smaller team size can lead to more responsibilities early on, which is a great opportunity for growth but can also be challenging.
Leveraging FDD Experience: Your experience in Financial Due Diligence (FDD) will be valuable, especially your analytical skills and understanding of financial statements. However, PE involves a deeper level of financial modeling including LBO, M&A, and DCF models. Your FDD experience will provide a good foundation, but expect a learning curve in mastering the depth of modeling required in PE.
Cultural Fit and Work Dynamics: Small firms often have a distinct culture and way of working. It's important to adapt to the new environment and build strong relationships with your smaller team. Being proactive, communicative, and adaptable will help you integrate more smoothly.
Continuous Learning: Even if the final interview isn't super technical, prepare to continuously upgrade your skills, especially in financial modeling and industry-specific knowledge. Utilize resources like the WSO Financial Modeling Courses to sharpen your skills.
Networking and Mentorship: Build relationships within the firm and with external advisors and stakeholders. Having a mentor within the firm who can guide you through the nuances of PE can be incredibly beneficial.
Expectations Management: Be clear on what is expected from you and regularly seek feedback. Small firms can have high expectations from their employees due to the lean structure.
By embracing these challenges and preparing accordingly, you can make a successful transition from Big 4 FDD to a small PE firm. Remember, your ability to adapt and continuously learn will play a crucial role in your success in this new role.
Sources: Transition from Big 4 Consulting to PE - Advice needed, Big 4 Audit -> TAS/FDD -> PE advice/experiences?, Exiting Big Four (Audit) after 5 years and entering FP&A - Ask me anything
what do you do in FDD?
PE firms or corporations engage us to perform diligence on transactions. Consulting so tasks range. Main analyses are QoE, NWC, DDL. Also analyze revenue drivers and company as a whole, identify risk and concerns, review and adjust budgeted financials, etc.
i don't know the typical modeling capability/experience of people from FDD, but given your description of your experience, I think the ramp for you might be in the CDD areas/understanding the industry and business (rather than financial/accounting aspects), especially for firms that do their own deep sector research.
I did this but had a 16 month banking stint in between. PE modeling is way different than FDD and it’s definitely a learning curve but the biggest adjustment is working on multiple different things at once that are far apart in technical vs. conceptual knowledge. In FDD the work is very focused on a specific set of deliverables but in PE, it can change all the time. Sure you have the standard deal work streams but within that there’s still a ton of variation.
A FO role could be quite different though, compared to a traditional buyout fund where you’ll have a lot of portco work on top of deal work.
I would stay open-minded as you work through and familiarize yourself with the different analyses typical of a normal deal process but outside of that, it’ll be a learning experience for anyone
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