Many private equity firms rarely hire straight out of college — traditionally opting to take their pick of associates after they spend a couple years at investment banks.
But as competition for talent heats up and timelines to hire associates compress, big PE firms including KKR, Blackstone and Bain Capital, are ramping up college outreach and casting a wider net.
These firms hit up many of the usual suspects — Harvard, Columbia, and other Ivy League-schools — but others including Southern Methodist University (SMU), Boston College, and University of North Carolina are getting a piece of the action.
And some colleges have been positioning for the shift by building specialized undergrad programs and making overtures to PE firms big and small.
Through insiders including recruiters, academic advisers, PE hiring executives, as well as public sources like LinkedIn, Business Insider gathered some of the schools outside of the Ivy League where private equity is scouting future stars.
We put together a look at what some colleges are doing, and a firm-by-firm glance at where the biggest PE shops have been recruiting.
To be sure, many firms are largely still refraining from recruiting undergraduate investment analysts, and outreach and programs at schools do not ensure promises of actual placement. And firms are keeping hiring classes small — even some of the bigger names hire only a handful of people — so the field is extremely competitive.
Bain Capital, for one, started college recruiting a little over a decade ago but has told us that this year is shaping up to be its busiest undergraduate season ever. The Carlyle Group, though, only recruits analysts for non-investment positions — namely, fund management and accounting.
The outreach reflects private equity firms’ push to diversify their ranks, as well as an effort to beat competitors to promising talent early on, insiders said. Firms are also taking advantage of technology like webinars to hit a wider range of schools.
“There has been a noticeable change this year with the really large PE shops starting to recruit college grads and starting internship programs,” William Maxwell, a finance professor at the Cox School of Business at SMU, told Business Insider.
SMU is one school where PE firms, including KKR, have been looking, a process where Maxwell has clear line of visibility, given his role overseeing an honors program dedicated to alternative asset management. He said about 50 students from the program go into investment banking ever year, but private equity is increasingly showing up at the doorstep.
“Some firms are determined to get first shot,” he said.
Shawn Munday, a finance professor at the University of North Carolina Chapel Hill’s Kenan-Flagler School of Business, has observed a similar scene. Private equity firms including Blackstone, Roark Capital and Falfurrias Capital, are showing up at UNC to directly recruit undergrads, he said.
“As a result, we’ve adapted to stay in front of this trend,” said Munday.
Over the past four years, UNC has added a curriculum for undergraduates to educate about the buy side, including courses covering how to evaluate deals and model leveraged buyouts. The school also offers boot-camp training, giving students the opportunity to source deals and build cases to invest for a UNC portfolio fund.
Amy Donegan, an undergraduate career adviser at Boston College, said that three years ago, the school did not see any noticeable PE undergraduate recruiting. This year, four PE firms — Broad Haven, Summit, Vista Equity Partners and TM Capital — are slated to recruit on campus in the fall.
“A lot of the students coming into these positions out of undergrad have the technical skills they need anyway,” said Donegan, who noted they have quant-heavy resumes, with skills in data analytics and Python.
And last year, Kansas State launched a program focused on preparing undergraduate students who want to become analysts either at an investment bank or private equity firm.
“We are offering a new class in portfolio management, and giving students a stronger, more in-depth look at the valuation process,” said Ansley Chua, a finance professor at Kansas State.
The Kansas State program seats 10 people and some smaller PE firms have hired Chua’s students, though he would like to double the program’s size and place students at larger firms in cities like New York and San Francisco.
Chua said he has been in touch with alumni members, including Paul Edgerley, a senior adviser at Bain Capital, who has hosted students at the private equity firm in Boston for informational sessions. (Edgerely and his wife Sandra contributed $20 million to the school earlier this year.)