The profession of private equity investor

Yassine Rochd has been working in the world of Private Equity for several years and has even launched a special medium. He explains to us what attracted him to this sector, but also the daily life of an EP professional.

The Journey of Yassine Rochd

Can you introduce yourself?

I graduated with a master’s degree in corporate finance and have been working in the Private Equity sector in Paris for over two years. I also spent two years in transaction services in one of the Big Four

The private equity sector

Can you explain to us what Private Equity is?

Private Equity consists of investing in companies that are not yet listed on the stock exchange. These companies can be startups, we speak of Venture Capital, or more mature companies that have already reached the break-even point. By investing in these companies, Private Equity funds (or investment funds) provide financial support to companies, a business network and support at all stages of development. The operation of an investment fund can be divided into 5 main stages:
• Fundraising from high net worth individuals or large corporations (banks, insurance companies, etc.) interested in investing in unlisted companies.
• Identify promising companies with solid financial foundations, strategy and quality management.
• Invest in these companies and determine the financial and legal conditions for taking an interest in these companies.
• After the investment and for a period generally between 5 and 8 years, support the development of each company, monitor its performance and help it grow and progress.
• Then, at the end of these 5 to 8 years, try to resell the shares of the company’s capital by realizing a capital gain on the initial investment.

Also read: Private Equity Funds in France.

The daily life of a Private Equity investor

Which of these different missions can an intern or young graduate claim?

During internships or at the start of a career, it is mainly on the second point that analysts intervene. They will therefore make their contribution during the whole phase of identifying a target and analyzing the fundamentals of this company. Indeed, before investing in a company, the Private Equity fund will study it from all angles. This requires a thorough analysis of the market in which the company operates, a study of its positioning and that of its main competitors, its development strategy, the experience of its managers and of course its financial fundamentals.

The intern or analyst reviews the company’s presentation, studies management responses during meetings, researches the market and competition, and summarizes everything in an investment note. He will also be able to support more experienced investors in the financial analysis of the target company and in preparing financial projections. He will also have the opportunity to participate in the financial model that makes it possible to determine the price at which the shares of the company’s capital will be purchased.

What attracted you to this profession and the world of Private Equity?

The investor profession makes it possible to meet inspiring leaders and help them grow. Their problems are equally fascinating. As an investor, we may be required to support them in their international development, in the acquisition of other companies or even in phases of growth, recruitment and acceleration of the existing activity.

As you have seen in the presentation of this field of activity, Private Equity is a very rich and diverse sector. It leads to many financial, strategic and legal aspects and as such is intellectually very stimulating. It requires good analytical skills, real financial technical knowledge, tax and legal knowledge and a good relationship with the leaders, so many skills that it is difficult to acquire it alone during your studies.

Also read: The Crazy Salaries of Private Equity!

How to integrate Private Equity?

What advice would you give to a student interested in Private Equity?

Private Equity is a highly selective sector that attracts many interns and young graduates. However, this sector does not recruit much. After all, the organization of investment funds is structurally based on relatively small teams. To integrate them, in training, but also and above all in CDI, efforts will have to be doubled.

I would therefore advise any student interested in this sector to start by discussing it with professionals in the field to learn more about this exciting profession. I would also recommend him to be curious, read articles about private equity and how it works. At Invest Prep, we have just launched a blog dedicated to Private Equity and a newsletter discussing the basic concepts of private equity and corporate finance. It includes mini-articles and typical Private Equity interview questions, as well as advice on how to join this environment.

Once launched into the job or internship search, candidates will have to make a real effort to prepare. The Private Equity recruitment process is known for being highly selective. They often include technical accounting and business finance questions, as well as modeling exercises in Excel.

Business Cool readers can also take the opportunity to contact me and share their questions with me if they wish.

To contact Yassine, visit his LinkedIn profile!

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