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I'm an incoming associate at a PE-heavy V10, and I'm noticing that many associates far down (up?) the partner track tend to have accounting/finance/business degree or an MBA. The correlation is bugging me because I have neither. Maybe it means nothing, but based on some comments that I heard as a summer, I get the sense that associates were also aware of this dynamic.

Juniors can cut it with responsiveness and a good attitude, but I'm assuming that at some point, I will actually need to know what I'm doing, and business savvy will help with that. My question is: what does that business savvy consist of? All else equal, do associates excel by having fundamental understanding of business concepts or do they need like hard skills? If so, what are those hard skills? Lastly, what can I do to develop the business skills that I need to do well as an associate?

For what it's worth, I've made my way through a basic financial modelling course and one that specifically targets my industry (think like E&P/FIG, where the modelling is more complex). I know basics of corporate finance and accounting pretty well. Given enough time, I could probably take a 10-K and create something that vaguely resembles an operating model with a couple of valuation methodologies tacked on. I'm not sure that any of this would really help me. I can tell that what I know is still really basic and mostly oriented to getting past technical interviews for IB. The actual operating models that I see people build are way more complex with all sorts of different schedules and functions that I haven't learned about. Maybe I could figure those out with enough time--maybe not. This isn't even factoring in that PE models might also be entirely different than traditional M&A models. I also generally try to pay attention to the trends in my industry as well--though I've been doing a worse job at that since I had to study for the bar.

I also understand that business isn't just finance and accounting, but there's not a whole that I can do develop operational experience at this point. I'm not a K-JD, but I haven't really ever had a serious job either.

I get that this comes off as super gunnery, and it probably is, but I at the very least want to stick around long enough to pay my loans and build a decent nest-egg to make this whole law school venture worth it so I guess I'm asking TLS's help to help me do that.

Any advice is appreciated. Thanks.

You just need to understand the concepts. Seems like you'll be fine based on what you said you've already done and the fact that you are curious enough to ask on a message board. Find some good finance newsletters and read them on the subway when things are back to normal. Should work on running redlines and finding assignability clauses as a priority...jk jk.

If it makes you feel any better, almost nobody is going to make partner anyway.

UnfrozenCaveman wrote: ↑

Fri Sep 11, 2020 9:43 am

You just need to understand the concepts. Seems like you'll be fine based on what you said you've already done and the fact that you are curious enough to ask on a message board. Find some good finance newsletters and read them on the subway when things are back to normal. Should work on running redlines and finding assignability clauses as a priority...jk jk.

I agree. I do mostly PE M&A at my firm. I think you know more already than a lot of associates. Definitely not something to stress about. When you listen in on call with the client deal teams, you'll just naturally pick up on the kinds of things that are important to them.

One skill that I would suggest early on is to try to understand how the typical purchase price adjustments work in a standard cash-free, debt-free deal with a net working capital true up. It's not that complicated if you spend a little time going through a few examples. If you are able to model those out in excel, it will put you ahead of the curve. You'll also be surprised how many PE associates at the client may not understand how this works so it can be a value add when you are reviewing their funds flow / closing statements.