Introduction to Newman Sykes
Financeprofessional.com Interviews Recruiting Firm Newman Sykes
Financeprofessional.com: To start off, can you tell us a bit about your backgrounds? What did you do before you became a recruiter, and how did you get into private equity recruiting? Please also tell us more about Newman Sykes. What are your specialties, and why did you start the firm?
Newman Sykes: We started Newman Sykes in November of 1999. We focus exclusively on placing second and third year analysts from the investment banking and consulting programs (i.e., pre-MBA candidates) into private equity situations. We are the only search firm to focus exclusively on this target market. We started the firm because we both had done hiring at this level in the past and had an opportunity to do some market research on the search firms active in this marketplace. Based on our research, we felt that there was a great opportunity to distinguish ourselves based on our backgrounds and our business model.
Financeprofessional.com: The name game: Obviously, venture capital is basically early-stage private equity, yet when we talk about "private equity" in industry newsletters, it seems that there is separation between angel/early-stage venture capital and (later-stage) private equity. Leveraged buyouts are also often set aside as a different segment as well. Can you give us a good definition of what people in your industry mean when they say "private equity?"
Newman Sykes: In our view, private equity encompasses both early stage (venture) and later stage investing (buyouts).
Financeprofessional.com: Can you talk about the trends that we are seeing in the private equity markets these days? It seems the large firms continue to raise huge funds in the United States, and many of them (Hicks Muse and the Carlyle Group, for instance) are making forays into the European and Asian markets. What kind of impact does that have on investment bankers seeking to enter the market these days? What about all the money entering venture capital/private equity in general these days? How is that impacting the job market in your industry?
Newman Sykes: The market we cover is very deep, more so than we imagined when we launched the business. There has been a great deal of fundraising activity in the private equity industry, creating many opportunities for junior people with the right skill set. US funds are setting up shop internationally as well, providing opportunities for people to work overseas, but typically the junior professional would need to speak the language of the country in which the fund is based (i.e., Mandarin in Hong Kong, for example).
Financeprofessional.com: What about trends and opportunities at smaller firms?
Newman Sykes: Same as above. Earlier stage funds may require different skill set, depending on needs. Some early stage firms value the skills typically developed in consulting industry because there is not much financial analysis required at the very early stage.
Financeprofessional.com: What is the ideal background for a candidate who wants to get into private equity? What formal educational requirements are there? What career paths are ideal? What intangibles do the firms like to see?
Newman Sykes: We focus on hiring candidates who have completed two or three year investment banking programs at Wall Street firms or have completed similar programs offered at the major consulting firms. Often our clients look for candidates with mergers and acquisitions or leveraged finance experience; some like specific industry experience, depending on the investment focus of the firm (i.e., health care or telecom). Most private equity firms are quite small and chemistry/fit is critical. Other important qualitative attributes are: great attitude, hard worker, good interpersonal skills and lots of smarts. With some firms, prior academic performance is important.
Financeprofessional.com: What does compensation look like in the industry these days?
Newman Sykes: Compensation varies broadly within the private equity industry. For the market we cover, packages typically include base salary, bonus and some form of participation in deals. In our experience, annual all-in cash packages vary from $100,000 to $200,000 and typically include some kind of equity particpation, more often co-investment opportunities than carry.
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Introduction to Newman Sykes