#13 - Connor Crandall - (J.P. Morgan, Warburg Pincus) | Investment Banking, Private Equity

In this episode, I interview Connor Crandall, who went from Brigham Young University to investment banking at J.P. Morgan and to private equity at Warburg Pincus.

Watch this episode on YouTube here - https://youtu.be/Tf3SvAIW4SI

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⏱Timestamps⏱
0:00 - Introduction
00:02:01 - Overview of background
00:02:36 - Breaking into investment banking
00:03:49 - Approach to securing internships early
00:07:02 - Early investments
00:09:00 - Decision to pursue PE
00:10:02 - Recommended financial resources
00:10:45 - Coping with banking challenges
00:11:50 - Daily life as an investment banking analyst
00:14:50 - Preparing for investment banking
00:16:00 - Difference between working in small vs large teams
00:18:18 - Adjusting to banking’s demands
00:20:20 - Recruiting resources for banking
00:21:30 - Interest in healthcare
00:23:27 - On-cycle vs off-cycle recruiting for PE
00:23:47 - How to choose PE firms
00:27:09 - Role of headhunters in PE recruiting
00:29:58 - Why Warburg was Connor’s top choice
00:33:15 - Preparing for PE interviews
00:37:37 - Warburg’s investment strategy
00:39:39 - Criteria for evaluating investments
00:41:49 - Insights into a specific PE investment process
00:47:47 - Walking through a PE deal
00:49:24 - Favorite part of the job in PE
00:50:40 - What made PE worth it
00:51:44 - Surprises and challenges in PE
00:53:54 - Involvement in portfolio companies post-acquisition
01:02:38 - Advice for aspiring finance professionals
01:04:13 - Personal lessons from PE
01:07:07 - Overcoming mistakes
01:08:00 - AI’s impact on private equity
01:12:21 - Reasons for pursuing an MBA
01:14:50 - Why growth equity as next step
01:19:24 - Alternate universe
01:19:55 - Influential mentor
01:21:30 - Advice to younger self
01:23:01 - Outro

Transcript

0:00

(upbeat music) Hey everyone, and welcome to the rareliquid podcast. In today's episode, I'm speaking with Connor Crandall, who is a fellow Wharton MBA classmate, and I guess also a fellow alumni of J.P. Morgan Investment Banking Healthcare, because we both worked at that group, although he worked in New York and I worked in San Francisco. After J.P. Morgan, he worked at Warburg Pincus in private equity. And if I, in a nutshell, kind of had to describe Connor and his story in one word, I guess, it'd be the word prepared. He knew what he wanted to do since a young age, and he was able to kind of execute on his plan, and I think it's pretty remarkable. So I'm really excited for all of you to kind of listen in on this episode and see how, if you prepare early enough, you can really achieve your kind of career dreams if you really put your mind to it. Now, before we get started, if you're interested in breaking into private equity, I highly recommend that you check out the PE Investing Certificate Program offered by Wall Street Prep and Wharton, which is where I'm currently getting my MBA. This program is sponsored by top firms like Blackstone, Carlyle, and KKR, and over eight weeks, you can learn at your own pace through this online course that's taught by Wharton professors, Wall Street Prep's PE Program Director, and real PE investors, including David Rubenstein, the founder of Carlyle, and Martin Brand, the head of North America PE at Blackstone. We'll cover topics like the PE deal process, valuation, how to think like a private equity professional, and more. By completing the program, you'll also unlock access to the alumni member database, fireside chats with PE investors, and exclusive networking events with the world's top private equity recruiters and headhunters. This program runs three times a year, and be sure to sign up by the early registration deadline to get $200 off, and be sure to also use my code RARELIQUID to get $300 off of the program. And if any of this interests you, I'll leave a link to all of this in this episode's description. All right, thanks, Connor, so much for joining. And I just wanted to first ask you if you can give us an overview of your background.- Yeah, happy to. So I'm from Salt Lake City, Utah, born and raised there. Went to BYU, which was a school come out 45 minutes south of where I was born in Salt Lake. I did that for my undergrad for four years, and then I worked for JP Morgan in New York City for two years, and then I joined Warburg Pincus, a New York-based private equity firm, for two years, and here I am at Wharton here.- Got it, and I wanted to ask,'cause I know a little bit about your previous experiences, and people are always curious to know about how to kind of break into investment banking to begin with, and I noticed, or I know, that you interned at a lot of smaller boutique investment banks and private equity shops. So can you talk a little bit about how you were able to gain experience first and then work your way into kind of like the bulge bracket banks and working at JPM?- Yeah, that's a good question. I think I was unique in the sense that I knew I wanted to be a professional investor and work in high finance from a very young age. I remember making my first stock investment in eighth grade and thinking, "This is the most exciting thing."This is exhilarating."This is the industry I want to work in," and I think because of that, I kind of had an early kind of path to follow, and that involved a lot of kind of working and interning at local private equity firms or investment banks in Salt Lake to kind of prepare myself to hopefully enter the high finance world. I think in hindsight, it's a lot of people don't have the same path. They kind of discover they want to work in finance a little bit later in their kind of college years, but still, I think it's really important to go kind of get that basic experience at local private equity or local kind of finance firms and wherever you are.- So how did you reach out to these companies? Like, how were you able to secure these internships? Like, was it mostly at BYU at like job postings and stuff like that, or did you cold reach out to a lot of people when you're reaching out to the boutique banks?- Yeah, so at the beginning, I kind of called it the friends and family approach. You need to go to your neighbors, your friends, your family, anyone who has a job in a finance firm that you want to work and see if they'll give you an internship, and oftentimes, these were unpaid internships. I kind of raised my hand and said,"Hey, I'm really interested"in learning about this industry."Can I come hang out, for lack of a better term,"for a few weeks this summer?" And that was really, I think, well-received, and it was helpful for me to kind of start to build my resume and ultimately kind of preparing myself for when I applied to the more kind of robust and established internship programs, such as J.P. Morgan's.- Got it, yeah, 'cause I know, based on your previous experiences, it seemed like you had, was it two, was it two boutique investment banking and two private equity internships before J.P. Morgan? Is that right?- Yeah, so in my undergrad, so before I graduated, or after I graduated high school, I worked for a mutual fund company. I did that, and then I took a two-year break and I served a mission, a religious mission for Church of Jesus Christ for Latter-day Saints, or colloquially known as the Mormon Church. So I was in Tokyo for two years, and then when I came back, I interned for kind of a search fund. There was a BYU alum who was looking for interns. There was an unpaid internship, did that. And then I also interned for kind of two, I'll call it local investment banks that were both on ties to BYU. And then I also interned for another local private equity firm my senior year that had kind of ties to BYU as well.- Got it, okay, okay. The reason I just wanted to double-click on this is that I think a lot of times what is not as obvious until you're actually really in the heart of recruiting for banking and learning more about the process is how important it is to have previous internships, because we both worked at J.P. Morgan. I was the recruiting captain for a bit. And whenever we were looking at resumes, we would always first see if that person had previous experience in investment banking, or like at a boutique shop, or private equity firm, anything kind of finance related. And I can just imagine if your resume came along with all those experiences, I probably would have been like,"Yeah, let's give this person an interview." So it seems like you kind of did it the right way. And I also was curious about, you said in eighth grade, you started investing. Was that into just only the stock market? And I'm sure, I started investing when I was in college, and there were a lot of times where I made very poor investments and learned really quickly. Can you kind of go a little bit more into what you found so interesting at such a young age? And were you reading books like "The Intelligent Investor" or like "Hedge Fund Market Wizards"? Like what kind of resources were you using to learn more as you were investing at that age?- Yeah, so I had been begging my parents. I said, "I really want to invest money." I had saved up some money from cutting my parents' lawn and the neighbor's lawn and kind of doing odd chores around in the neighborhood. Kept begging them to let me invest. And they kind of brushed it off, being like, "This is not like a normal"sixth, seventh, eighth grade request." And then finally in eighth grade, I was like,"Okay, here's the three stocks I want to invest." And I invested in Bank of America, GE, and Caterpillar. And ironically, that year, I think Bank of America was the worst performing stock. Caterpillar was the best and GE was a little over break-even. And so it was kind of, I'll call it an unremarkable first foray into the investing experience. But it kind of gave me that fire and that desire to want to learn and really enter that path. In terms of what I was reading, I remember my mom gave me the, I think it's called the "Rich Dad, Poor Dad" book. I remember reading this thinking like,"This is not what I wanted."I wanted something meatier, a textbook." And it kind of, again, kind of kindled this desire to want to learn more about investing, which ultimately kind of pursued me to study finance in undergrad and then come back for an MBA to kind of really try to learn and hone that skill and that craft.- Okay. And as you were going into high school then, were you continually investing and learning more about finance or, I mean, how, was there any kind of big jump for you when you were first learning about finance and then something that really triggered and solidified for you? Like, "Oh, this is truly what I want to do."- Yeah, so I think, you know, after that first experience, when I realized that investing in public equities, I seemed to be just okay. And it was a lot more kind of luck in picking Caterpillar and I'll call it bad luck in picking Bank of America. I think I invested mostly in just kind of index or a couple of mutual, like local mutual funds where I had friends, parents who were working there. And it wasn't until I'd say college when I was working for a search fund. And that was my first introduction to private equity, this concept of purchasing a private company and then operating it. And that really struck a chord for me. I felt that was so fascinating. You didn't have to deal with the public markets kind of sifting through, you know, the same information that everyone has. And that was really when I decided, you know, private equity was the end goal. I wanted to be a private market investor.- So does it, it sounds like then maybe, was that during your freshman year?- I think that was my sophomore year.- Oh, sophomore year, okay. So starting sophomore year, you're like,"Okay, I want to go into PE and all of that."- Yeah. - Okay, interesting. And I'm also wanted to ask about how you get your news now and like what resources, like we'll go into like the banking and private equity stuff later, but when it comes to you learning more about how to become a better investor, do you have any like tips for books to read or anything that you've come across that has really helped shape you in terms of learning how to become like a better investor?- Yeah, in terms of kind of the books and the information I read, I love the Wall Street Journal. I feel like that is a classic for any kind of finance person. And then I kind of read and listen to, you know, read a handful of different newsletters I get in my inbox, kind of ranging from tech to just broader kind of markets. Bloomberg does a great one that I like to read every morning. And then there's, you know, some podcasts here that are great. And then I'm trying to read whatever is kind of most popular and new. I think I found that during school, I haven't had as much time to read, but hopefully I can kind of keep reading moving forward.- Got it. Do you have maybe like one newsletter recommendation or like a podcast recommendation, book recommendation that people can kind of look into?- Yeah, so I'm gonna say newsletter, the Bloomberg, I think it's called the Daily Brief. I really like that. It gives a pretty good kind of macro overview of what's happening in the world, what's happening in markets. In terms of podcast, I'm forgetting the name. I think it's called the Intelligent Investor or I'm spacing on the name on the podcast. And then in terms of book, I really love anything Morgan Housel writes. He has written two books. His first one was probably my favorite book of all time.- Okay, well, what's the book about?- The book is kind of about, it's almost like a behavioral finance talking about why sometimes quote,"People make irrational decisions," and talks about how, he just kind of breaks investing down into very simple kind of behavioral views and talks about how like one of his things is, at the end of the day, you have to make investing decisions that help you sleep at night. And it might not be the most rational, but it helps you sleep at night. It's probably better than making kind of a more rational decision, but it gives a lot of really interesting advice. And it's a book I reread every year.- Oh, wow. We read it every year. That's interesting. I don't think there's a book that I constantly reread, but it must be really good. And it definitely sounds like I need to check it out afterwards. And I was always curious, I also wanted to now kind of ask about your experience in investment banking. For you guys watching, Connor and I just met today actually, but we both actually worked at J.P. Morgan Healthcare in the healthcare group. I was in San Francisco, Connor was in New York. I first wanted to just ask, generally speaking, how was your experience? Did you, I guess, quote unquote, enjoy banking? What did you enjoy? What did you not enjoy?- Yeah. And before I answer that,"Psychology of Money" is the Morgan Housel book title I love, "Psychology of Money." But in terms of investment banking, I think investment banking was a really great first step to kind of launch your career. It's demanding, it's, you learn a lot about finance, you learn a lot about working hard, you kind of get an inside scoop into how a company operates and how the capital markets world and the M&A world operates. And I think that is just really a great kind of building block of your career. I'll be the first to admit, it's hard, it's challenging, it's not a walk in the park, but it's kind of like going for a long run or a long bike ride. And you kind of dread it a little bit at the beginning and halfway through you're thinking,"Oh man, I'm a little tired. I would love some, you know, kind of some sleep and some rest." But by the time you finish, now you look back and say,"You know, that was really impactful. I'm glad I did that. It was hard, but I'm glad."- Yeah. Kind of, if we could go a little bit more into the details, I would imagine that we actually had somewhat similar days here and there. But given, you know, a lot of analysts actually, I would say maybe have pretty similar lives. Like I used to live with another banker who worked, who was an analyst who worked at Perella. And sometimes we would exchange stories. I can also, I do think though, that given that I was an SFJPM, you're in New York, sometimes worked for similar directors. We may have things in common, I guess, in terms of like what our days were like. I was wondering if you could go into the day and the life of an investment banking analyst.- Yeah, absolutely. So let me go into the life of investment banking analysts. I'll start as when you're a brand new first year analyst, you want to be one of the first people to the office. And so you'll show up, you know, nine, 9.30, and you'll be surprised because the office will be pretty much deserted because everyone's still kind of recovering from a late night of work. And then usually you are kind of, you know, catching up on emails or reading in the mornings and then kind of call it midday, you know, work will start to flow to you. Usually it's kind of coming down the chain. So the partners and the MDs and the VPs are kind of delegating the work down to the chain. So then maybe call it, you know, 2.00 PM, 3.00 PM, you'll start working. You'll try to get a first draft to the MD or whoever you're reporting to. Hopefully, you know, kind of early on in the evening, maybe call it 7.00, 9.00 PM. And if you have a responsive MD, which they're not always so responsive, they'll kind of give you a turn of edits, call it before they turn in for bed. So maybe call it 10, 10.30. And then from there, you're going to kind of make those edits until the rest of the evening. And hopefully you're getting out at an early hour and you're trying to probably work in some couple of meals in there and maybe some exercise either in the mornings or sometimes in the afternoon.- Yeah, I always found this so hard to fit in exercise. I remember sometimes when I had the energy, I'd go to the gym, maybe at around like 9.00 PM with like one of my friends or something like that. Did you find that, how did you kind of cope with the long hours? What did you do?- Yeah, so I said I would exercise mornings because it was always so hard to sneak away in the evenings and so I'd always try to start my morning with just kind of like an hour, like 45 minutes minimum just kind of in the gym, doing something different to kind of break up the day and kind of hopefully give myself the energy to continue through. But my rule was if I could get to bed before 12.30 or 12.45, then I would go to the gym in the morning. But if it was past that, then I would skip the gym if I really was feeling tired. In terms of kind of making it through, I think it's all about kind of building friendships in the bullpen. We had, I think about my class, 15 analysts and then probably another 15 analysts in the class above and below us. And so we had a good bullpen of 30, 40 people. And because of that, there was always something happening. People were laughing, joking. And so you kind of start to embrace the late hours knowing you have some really close friends by your side also working and grinding together.- Yeah, yeah, definitely. I am thinking back now to my time in SF, we actually called the bullpen the jungle for whatever reason. I feel like actually usually it's always called the bullpen. But for our group, we actually had a pretty small group. We had two MDs at the time when I was there and two EDs, two executive directors, no VPs until later, two associates got promoted. And then I think we had at one point like five associates, five analysts. So it was pretty small and we built a lot of camaraderie within that kind of like small group, I guess.- Did you ever feel like in New York where you're one of maybe like 30 plus-ish analysts that you felt a little bit more like cog in the machine type or did you feel like a cog in the machine ever at all? Or were you able to still feel like the group was small enough where you could get to know the seniors and not feel like you were just like one piece of like the larger puzzle?- Yeah, I think that's the trade-off with being in kind of a larger office is there's just more people to go around. And so it's harder to get to know the people you're directly working for. I think the ones you do directly work for, you get to know, but someone who's maybe adjacent to you or you've never kind of, a partner you've never worked for, you don't get to know them as well. I think that's the trade-off. The nice thing is though, is there's so many different people to work for. You can kind of figure out who your people are and who you enjoy working for. Like, I think back to my experience and I can think of a few senior people who I really enjoyed working with. I understood their styles and built a lot of trust and I found myself starting to work for them more so. And then the same thing goes for the analyst. You kind of find the analyst who you're friends with and you start to spend time with them and kind of joke and laugh around at night. I remember we smuggled in a pull-up bar and so we'd have pull-up competitions in the evening. And then we'd also, we had a football and we tried to throw it across the bullpen but because the wind, like the ceilings are so low, you have to throw it like perfectly on a line. And so that was like our evening challenge. We'd all gather on one side and we'd see who could throw the football the longest. So definitely some, call it some rowdy behavior, but it was fun looking back.- Yeah, that's funny. We also had like scooters that we would ride around or just one of them. We also had, I remember at some point we had a golf ball and golf club and we just do like putting competitions around the office and our MDs would sometimes get involved as well. And yeah, so I definitely do think the camaraderie helps a lot with the tough work-life balance. And I also wanted to ask if you had anything that comes to mind in terms of what makes banking tough. So for example, and I'm kind of asking for any of like the small details that you may be not able to find online as well. So for example, I think what's not readily, easily understood is how close you have to be to your emails all the time. And basically when you're in banking, you're expected to respond within the next, when you get an email, especially if you're on a live deal, like probably within minutes and usually get a notification. So as an analyst, what I tended to try to do, if I got a notification, I need to send an email, respond to it like immediately. And I remember at some points where I felt like if I was responding to an email after like 20, 30 minutes and I was in the office and in hours, and that's just like way too late. You wake up in the morning, you're also reading like 20, 30, 40 emails, depending on what deals you're on. And I remember when I left banking, the first thing I just remember thinking about was, wow, I can delete my app off my phone. I don't have to look at my email. And that was like one of those details that I just didn't know about banking that made it kind of challenging. Was there, is there anything that comes to mind for you?- Yeah, I will agree with you. Deleting the JP Morgan email app was a fraying experience as you click that and a weight of anxiety disappears. You know, I think in banking, there's a lot of little things that no one talks about that you really have to kind of figure out. And those kinds of cultural things are going to be different for each group. And that can be, you know, how quickly you respond to your emails and whether, you know, if you're on a live deal, you can kind of tell your other teams, hey, you know, I'm pencils down on everything else and running full force at the seal. Like sometimes that happens with certain groups and certain people are okay with that. Other groups will expect you to kind of manage across different deal teams. And so I think there's a lot of things like that, that you have to kind of figure out and suss out from the analysts ahead of you and figure out what the group culture is. You know, one thing I think was important is, you know, in the first part of your, that's like a year one analyst, you're really just learning how to do the job. You quite frankly, don't know how to use all the technology, all of kind of the formatting. And so that first year is really important just to learn how to do the job and establish your reputation. And then in year two, you are much more kind of picking the people who you work with and starting to kind of excel a little bit more and take on a lot more work. And I think no one ever tells you that, but it's really important to establish your reputation and then, you know, to figure out kind of who your tribe is for lack of a better word.- Yeah, I definitely agree. There's a huge difference. I'd say also within that first year, in your first six months, I think after six months is where I kind of felt like, oh, I know how to, I know what I'm doing. And then after that first year, I felt like I was really like in the flow of things. But the tough thing about, I learned about banking is the better you get, the more work you're given. And so you're just constantly giving more and more work. And I'm also, you kind of also mentioned about in that first year, like getting better. Did you, as you were kind of preparing for banking, was it, were there any materials that you used that really helped you get a leg up at all? For me personally, I actually had more of a consulting background before banking. I actually went in not really knowing much besides the two months training that they gave. Did you prepare beforehand at all?- So I didn't prepare a ton, but I felt like kind of, you know, having done a few investment making internships and a few private equity internships, I had a pretty good grasp of kind of basic level finance and kind of basic level call it client service demands and what it takes to produce like a client service ready materials. And so I didn't prepare a ton. And I think sometimes it is almost better to not prepare, to just start as like a fresh slate knowing, you know, once you hit the job and hit the desk, you're going to have to run 110%. And so you might as well be refreshed and ready to go and make sure you're learning it, you know, the right way, because each group in bank kind of does things slightly different. And there's, you know, different ways to make the sausage sometimes.- Yeah, yeah, that's true. Whenever new analysts are going in, I remember the advice I used to always give them is yeah, just make sure you're well rested before you start working. And I also actually wanted to ask about your interest in healthcare. What made you want to recruit for the healthcare group?- Yes, that's a good question. So I actually didn't have any interest in healthcare, but I'd heard that the healthcare group was kind of JP Morgan's best coverage group. And I really wanted to get a job in private equity. And I felt like, you know, I should align myself with the best coverage group. Hopefully we get really strong deal flow and deal experience that would lend itself well to recruiting for the buy side. So that's largely why I picked healthcare and looking back on it, did I have any underlying interest in healthcare? Not really. I think I was more so interested in kind of using it as a catapult.- Yeah, I guess that's a good segue into private equity. Were you, did you partake in the on-cycle recruiting process for private equity or were you off-cycle?- Yeah, so I recruited on-cycle and this occurred a week, like the first week I hit the desk by, I think it was like Thursday evening. I was recruiting through the night for the on-cycle recruiting, so kind of a wild, wild timeline.- Yeah, so could you remind me what year that was then?- This would have been 2019 and I think it was around either August or September whenever training would have finished.- Okay, yeah, yeah.- So 'cause I remember, so I was at JPM from 2015 to 2018 and back at least in 2015 was when I would like start in on-cycle recruiting for private equity firms, which I didn't partake in, but I think back then they were reaching out closer to later in the fall. Maybe it might've been like October, November, December or so, but I remember all the offers at least were given out around at least end of December, early January. But I think the process has sped up more and more as private equity firms are trying to kind of one up one of each other and get the best candidates. So for you, and just to, do you mind actually kind of explaining in case people don't know what on-cycle versus off-cycle private equity recruiting is?- Yeah, absolutely. So on-cycle private equity recruiting is when you have the kind of majority of mega funds and kind of upper middle market private equity firms launch recruiting processes. And this usually takes 24 to 48 hours where they'll fill most of their classes. This is usually called 75% of those seats are filled from that on-cycle wave. And then they will usually save some spots for off-cycle. And then there's also some firms who will say,"Hey, we don't wanna do on-cycle recruiting."We'll wait, do the off-cycle." And off-cycle basically means anything that's not on-cycle. Off-cycle timelines can be three weeks. They can be four months. They can really drag on.- Got it. And can you also actually explain the part where the headhunters are kind of reaching out?'Cause I think for people in finance, they know that's just part of the whole system, but I don't think a lot of people outside of finance know what an important role headhunters play, especially for on-cycle recruiting.- Yeah, so headhunters are essentially the gatekeepers in terms of getting access to these firms. And so the existing, call it second year analyst, will literally send your email and say,"Hey, here's the incoming"J.P. Morgan Healthcare analyst class." They'll send the emails to the headhunters who they worked with, and will say, "Here's the class."Feel free to reach out." Or sometimes these headhunters will go on LinkedIn, find your email, and they'll start kind of sending you an email saying,"Are you interested in recruiting for private equity?"Have you given any thought?"If so, let's meet and kind of discuss"what you're looking for." And they'll basically compile a big roster of potential clients, potential private equity investors. They'll send that to their various clients, which are the private equity firms, and say, "Here's the clients who we'd like"and think you should interview and consider." And then the private equity firm will review the list and kind of start to figure out who they want to bring in for when that recruiting process kicks off.- Yeah, and do you remember the names of the headhunting firms you worked with? I know there's a lot of popular ones. So just so that people kind of have more specific details.- Yeah, so there's a handful of headhunting firms. They all kind of have different specialties, different client lists. There's a lot of great ones. HSP, CPI, Amity, Ratio, Gold Coast. There's, I'm forgetting a few of them. I think there's Oxbridge. Handful you can find online. I worked with pretty much all of them. And HSP was the one who represented Warburg, and they also gave me a few other super days. Had a really good experience with them.- Yeah, and so my understanding is that private equity firms they want to outsource their recruiting in a bit to these headhunters who, as you mentioned, are somehow able just to collect every analyst's emails. I remember getting those emails too. I'm like, how did these people get my email? I actually did also meet with them. Can you talk a little bit about your interactions with the headhunters? Usually it's pretty like behavioral. They just want to kind of see what your interests are. They're highly incentivized to have you placed at a private equity firm because that's how they earn their money. So they're kind of on your side, right? But did you feel like you had to try to kind of compete at all and try to, how important was it for you to kind of make a strong impression, I guess, or good impression with these headhunters?- Yeah, so these headhunters, when they meet with you, they ask you a lot of behavioral questions of, kind of where are you from? What cities are you targeting? What type of firms? What style of investing? They really want to get a picture and a sense of what you want. And they'll try to show you those opportunities that they think either kind of fit your background or fit what you can get. Because at the end of the day, as you said, they're incentivized to just get you a private equity job as they get paid on like a per head basis, I think most of the time. And so I think there is this kind of interesting dynamic where you are competing against every other candidate who's coming through because you want the headhunters to be more impressed by you and to ultimately show you more job opportunities. And I think sometimes the headhunters will kind of look into your experience, your school, kind of your overall resume, as well as how you kind of behaved in that short, 15 minute call to gauge what firms they want to give you opportunities at.- And how did you prepare for private equity recruiting? I know it sounded like you were pretty interested in PE for a while. Like, had you already practiced a bunch of LBO modeling? How did you prepare for PE recruiting?- So my sophomore year, I did that search fund internship, knew I wanted to do PE, realized my best shot would be to go through investment banking. And so kind of went and did the investment banking route, but my senior year, I worked for a private equity firm in Salt Lake and learned a lot. And I also took kind of a private equity class on a BYU and about six months, call it maybe, I think January, I started prepping and started to do kind of a, pretty frequently an LBO model a few times a week and kind of started building out my investment framework and prepared with a few close friends who are also recruiting from BYU. We basically said, how can we make sure that when that on-cycle recruiting hits, we are very prepared and ready to go. And so it was a very kind of a dedicated approach to making sure I would stand out in that recruiting process.- Yeah, that sounds like exactly the way you should do it if you do have the insight that you do want to work in PE. Because for me, everything just hit at once and I didn't really, I knew that buy-side recruiting would hit, but at the time I didn't know if I wanted to do buy-side or not. And looking at my friends who did end up recruiting for private equity, especially because it's so early now, I do think that, especially if you have gotten your junior summer internship at like a bulge bracket bank and you're going to full-time, like then, and you're going to go into full-time, then in your senior year, as you kind of mentioned, starting off in January, it could be, I guess, even a little bit later, but practicing LVO modeling and stuff like that is probably the best way to really secure a job at one of the top PE funds. And so I was actually also curious to learn more about the interview experience. Did you end up recruiting at, how many PE shops did you end up recruiting at? And can you kind of describe the interview process for these firms?- Yeah, so I'll never forget. I remember sitting in the JP Morgan cubicles thinking, oh man, it feels like PE firms are going to kick off recruiting. I was hearing that, you know, people have been tracking the private jets of these PE firms and they're all flying into New York. And it was kind of this anxious energy of, you know, when is it going to happen? You're looking around seeing, oh, I wonder if my friend, you know, the other analysts, I wonder if they're recruiting. Everyone says, oh, I might not recruit. No one wants to tip their hands. But I remember getting the text from my good friend, Drew, who we'd prepared together for the past six months. We lived in the same apartment complex. And he said, recruiting started. I have an interview tonight. I remember thinking, oh my gosh, I cannot believe it's here. And so I kind of waited. I didn't hear anything. I started to get pretty nervous. It was like 8 p.m. I was thinking, oh man, this is not a good start for me. I haven't heard anything. A lot of my other BYU friends were already interviewing. And then KKR called me and said, hey, can you come interview at 11 p.m.? And so, you know, I'm sitting in my apartment. I left work early. I throw on a suit. I grab some caffeine, have something to keep me awake. And I go and I start interviewing at KKR. And then while I am kind of going over there and in the KKR waiting room, you just start to get all these emails from other firms kind of scheduling interviews for the next day. And so I went, I interviewed at KKR until about 2 p.m. And I remember as I was in their offices, I saw two other BYU guys. And we kind of all looked at each other thinking, there's no way they're going to take three BYU guys here. So I guess we're all competing against each other. And at some point, I think like 1 p.m., I got an email that Warburg wanted to interview me at 7 a.m. the next day. And I was really excited as Warburg was the number one place I wanted to go. And so finally, I think about 2.30 a.m., KKR dinged me, told me to, you know, they'll circle back with me in the morning. I knew I was out in the process. I went home, kind of got a few hours of sleep. I woke up and I went to my Warburg interview and things started to go really well. I had a Carlisle and I think a few other firms kind of slated for about 10 or 11 p.m. or 10 or 11 a.m. And I was interviewing at Warburg. Things started to go really well. And I was just waiting in a room. And I started to worry that, you know, I might not be getting an offer here. And I kind of reached out to the head hunter and the HR person I was working. I said, "Hey, I have another super day with Carlisle."If I'm not gonna get an offer here,"I'm gonna walk out of this room." As soon as I said that, they said,"Okay, well, you've got one last interview." They brought me in. They said, "Well, we're giving you an offer."Here's the paperwork." And they said, you know, well, first they were like,"Well, what would you do if we gave you an offer?" I said, "I'll sign on the spot." And they said, "Great, here's your offer."Let's see it." - Oh my God.- And so I pretty much signed on the spot. And so that was my story. - Dang, that's crazy. And what an, that's like absolutely an insane, what was that, like 24 hours or so?- Yeah, like 24 hours. I remember signing out on the spot. I went back to the JP Morgan office and kind of pretty much just slept at my desk the whole day pretending to do work. I think I was one of the only analysts there. The analysts who had gotten offers all kind of started to filter back in. Some just didn't come in knowing there's no way they're gonna show their face.- Yeah, and so then how was the office mood during that time? Because unlike from my experience where there's so few of us that, let's say like one out of the five analysts or two want to do buy-side recruiting on-cycle, then yeah, they might step out, come back. But I know that in New York, people do on-cycle recruiting a lot more, I think on average, and there's a lot of you guys, right? So you guys must have all kind of been doing it at the same time, or was it kind of staggered where not everyone was gone at once? And the seniors also must know that recruiting is happening. So what was the mood like in the office?- Yes, I think the mood was kind of this pretty tense mood. Most people recruited for on-cycle, and I think the JP Morgan class, the healthcare class did really well and a lot got jobs. And so people were kind of really happy when that happened. I remember the following week, I think of the Monday, the resource manager had this big meeting and talked about why we should not recruit for on-cycle. And I remember looking around, making eye contact with all the people who did, thinking, "Isn't this like three days too late?" But I think it's also interesting at the time, it felt like a big deal to kind of successfully get an on-cycle job. But in hindsight, it doesn't really matter if you get an offer in on-cycle or off-cycle, like there's so many different pathways to success. And one timeline isn't necessarily right for one person versus the other. And I think that is kind of how my mindset has evolved as it's, there's so many different pathways to finding a great firm and success in general.- Yeah, and I actually want to jump also back to that moment where you were given, they asked you, "What are you going to do if we give you an offer?" And they give you paperwork. I actually have heard this story from other people multiple times where they just kind of pressure you on the spot. And you're at that time, what, like 20-ish years old or 22 or 21, maybe a little bit younger, older. But for, at least for my friend who told me his story, they give you the offer and then they also in there have like the compensation figure of what you'll be earning. And then you're just like, "Okay, I guess like if I don't sign here, there's no guarantee that if I go somewhere else that I'll get that job, right?" And you, they kind of pressure you a lot in that moment. It sounded like you actually wanted to go to Warburg as your number one choice. So I am curious about that as well. But in that moment, I don't know, how did you feel? Were you just like exhilarated that you got the offer? Did you feel like at some level you didn't really have a choice? Like, how were you feeling in that moment?- So let's go back a few months earlier. When I was thinking about P/E recruiting, I made kind of a top 10 list. And I said, "Here are the top 10 to 15 firms I really want to work for." And I further split it and said,"Okay, the top three or four, if I get an offer from, I'll sign on the spot. It'll be a really great outcome for me." And I kind of further ranked the firms to kind of help inform my strategy. And for me, Warburg was at the top of that list. And so when I got that offer, I was exhilarated. I knew that Warburg was a place I'd sign on the spot. I was really happy about the firm, really wanted to work there. And so for me to see that, I signed as quickly as I could and-- Before they took it away.- Exactly, signed as quickly as I could and then walked back to work. And I think that experience is not like everyone's recruiting process. I think private equity recruiting can be a lot of luck and it's a bit of a crap show. You have firms who are kind of frantically scrambling and trying to get as many candidates as they can. And as a candidate, you might really want to work for Blackstone or name the firm. But if those firms quickly fill their seats, you have to be willing to pivot and say,"I'm just as excited about this different firm that wasn't on my radar, but kind of clicks and checks all the boxes for me."- Yeah, and what were those interview processes like? Let's say specifically for Warburg, how many interviews did you have throughout those 24 hours or so? And can you go into the maybe LBO modeling tests at all that they gave? What were you doing during those 24 hours?- Yeah, I'm trying to remember. It's been so long ago. But so I remember, I think I started about 7 a.m. It was a few kind of first just cases where that was, here's company A, here's company B, here's a bunch of different kind of differences about the company. What would you want a diligence? Which company would you like more? Kind of a few technical interviews, largely kind of paper LBOs with a few wrinkles. And then, and there was a handful of those, I think the first two hours. And then at some point I got moved into that waiting room and I was thinking like,"Surely an LBO model must be coming." And then I had a couple more just fit interviews with more senior level partners. And again, I was thinking like,"I have not done an LBO model yet. This is not a good sign." And so when I got the offer, I asked them, I said,"Is there no LBO model test this year?" And they said, "Oh, this year, since we're recruiting so early and people haven't finished their training programs, we're actually not doing an LBO model test." Which I think is kind of an anomaly relative to the rest of the private equity world. I think we have increasingly seen that in the market as people are kind of tweaking their tests to either be kind of, you know, here's an LBO model with a bunch of errors. Find the errors rather than a full LBO model test. And so that was my experience, but you know, each firm can do it differently. And I think I got lucky, to be honest, that there wasn't an LBO model test. That was kind of just, you know, luck.- Yeah, well, I guess you'd have to do a paper LBO, which is simpler. I guess people still should learn how the functionality works and obviously better always to be over-prepared than under-prepared. And I think it's also kind of just interesting. You had prepared since like January, probably practicing LBOs a ton. And then when the time comes, you don't actually even need to do it. But I also wanted to ask about the case studies you were given a little bit. Can you go into any more detail as to what's kind of in there? Is it just like a business, like a situation over overview of like, I guess a company overview and some of their financials. And maybe do you talk about like what you would diligence and whether or not you would invest or not? Like what do you, what was in the case study and what do you have to do?- Yeah, frankly, I just honestly don't remember the exact details, but I think of it as kind of described a company, described some characteristics and they're looking for you to show how you can think like an investor and say, here's the good characteristics. Here's the areas I'd want to diligence, the areas I want to push on. They also want to see you do it in kind of a systematic way. They don't want you to do a shotgun approach and kind of just throw up a bunch of different answers and thoughts. They kind of want to see you work through it and think through, this is how I should approach a potential investment.- Now, as you've learned from Connor's story, he first made a conscious decision to break into investment banking and then went through the on-cycle recruiting process for private equity. And with that first initial step, if you're interested in breaking into private equity, you're first, ideally I'm probably going to want to break into investment banking first. And on that note, I've been working on a video course for how to break into investment banking that doesn't just teach you the concepts, but also has you go through Excel exercises as you're kind of going throughout the entire course so that you can put a lot of the theory into practice. And so I'm really aiming for it to be one of the best, if not the best resource out there for investment banking recruiting. I've been working on it with people who have worked at Evercore, Goldman Sachs. I've worked at J.P. Morgan Healthcare, and I've been also working on it with someone who's worked at J.P. Morgan M&A. And so if you're interested in this, I'm giving 50% discounts for people who sign up early. I'll leave a link to all of this in this episode's description. So feel free to check it out if you're interested. I now want to go a little bit more into Warburg. And you mentioned that as you were looking into the PE, all the different firms, Warburg was kind of at the top of your list. Why was it one of the firms that you really wanted to work at?- Yeah, so there's a variety of different reasons why I wanted to work for Warburg. First and foremost, they're one of the oldest, and I think they all claim the original private equity firms. And I really love that kind of a deep history of shaping the industry. Two, I had a couple of close friends who had worked as associates over the few years. And when I called them and asked them about their experience, they were really honest in saying,"Yeah, you work hard, but the culture is great."The people are wonderful,"and it's a great learning atmosphere." That was really important for me. And then two, I was really interested in kind of growth, a little bit more of a growth mindset. I like private equity, but I was kind of interested with this idea of growth. And I felt like Warburg have this kind of growth in their DNA. And most of their deals they do are growth buyout, as well as kind of some more traditional growth equity. And so that was just a really good match in terms of the investment mandate that I was looking for.- Got it. And you kind of touched upon this a little bit, but could you help describe Warburg's strategy and what differentiates the firm and its investing strategy versus other PE shops?- Yeah, so Warburg is about an $80 billion private equity firm. They just closed their latest fund. I'm forgetting the exact figures, but I want to say it's like 16 or $17 billion. And they're unique in that they will use kind of one global fund across the whole globe. And so you could have an office in Asia, an office in Europe, all writing checks out of the same fund. And so this fund is almost a pretty diversified view of the whole world, which is pretty cool. And they have different kind of core strategies they'll invest in, including healthcare, technology, business services, industrials, financial services companies. And so each team will kind of have a, they have their discretion to invest in certain areas. And Warburg typically, they will sometimes go as small as 50 or $60 million check size, but more so, I think the sweet spot for them is two to $300 million. And they can flex up to a billion dollars or so of a commitment. But by and large, I think that two to $300 million range is probably more so the sweet spot. And they're flexible. They will do, they can do a full buyout. They will buy a minority piece. They will invest in alongside other sponsors. And so it's really kind of a pretty flexible mandate and they just want to invest and own kind of the best growing companies in the world. And that really resonated with me.- And so what kind of criteria were you using as you were looking at potential investments? Was there any kind of framework that Warburg was using or a set of criteria as they were looking at potential investments?- Yeah, so Warburg, and particularly I'll speak to the healthcare group as that was the group I was in, they're very thesis-driven, culture and thesis-driven firm. And so what that means at the beginning of the year, we would meet as a broader healthcare team and we'd identify kind of the key thesis and trends we were seeing we wanted to explore for the year. And so we would pick a trend, we would build out kind of the thesis, we'd map the market, identify the top platforms and companies, and we'd go talk with these companies and started to kind of shape a view on which assets we really liked. And so Warburg's been doing this for years and so they might have kind of a wishlist of companies and they'll wait until those companies come into market. And so it might be, you know, from five years ago, you've been tracking a company and now they're coming to market, then you'll take a swing at that. So they're very, I'd say unique in the sense of they will map a market, identify kind of their wishlist and be very calculated in the swings they take and really chase assets they like really hardly.- Do you feel like it was a little bit different at all versus other PE shops and from what you've heard maybe from other investors at different shops?'Cause I think generally speaking, private equity firms are known to be very calculated, very careful with their investments. I think, for example, I remember working with CDNR for when I was at JPM and they were making a bid and they were so thorough and they were, their ultimate bid was not like the highest either. I know PE shops can be like a little bit conservative. Do you think that with Warburg, can you kind of go into what, as you were talking about, how you guys are very thorough and everything like that, can you get like maybe like give us an example that really brings this more to light?- Yeah, and so I think each firm and fund has a different strategy. You go to a lower middle market shop, it might be much more kind of a volume of having as many SIMs which are kind of company overviews sent from bankers. They might wanna see as many of those as they can and use that to distill down the best companies they wanna chase. Some places are more heavy sourcing models, meaning the junior investors are actively reaching out to CEOs, trying to find those who need capital. Whereas Warburg, I'd say is the tech team does a little bit more in sourcing, healthcare does some sourcing, but it's very more kind of thesis driven. And when we find a company we like, we'll do lots of customer calls, we'll try to meet them at a conference, have kind of our industry advisors introduce us to them and do a lot of kind of outside in work. Maybe you will engage a consulting firm to kind of do some further kind of pre-deal commercial work. And so when you know, you kind of will know what assets you like and when you know you have one, you'll make like a hard run at that and really pursue them if they are coming to market.- And can you, I guess also run us through one of the deals you might've worked on? And it doesn't, you don't have to give any names or anything, but I think what I'm trying to get at most is helping people kind of see what a deal process is like from start to finish at a PE shop.- Yeah, I'm happy to. I'll talk about a revenue cycle management platform that we bought and I'll obviously kind of not go into too specifics because a lot of the information's confidential, but this had been a platform that Warburg had been tracking for a number of years. They really regarded the management team well, thought the asset was really unique. It had been pretty high on the wishlist for the team. And when they started to hear that it was coming to market, you know, I was staffed on the team along with another associate. We had a fairly big team. I think we had two VPs, a few partners as well. And you know, when you have a deal that comes to market, things move very quickly. You typically are kind of running full seam on the commercial work, which is, you know, diligencing the company. You're building a financial model to understand, you know, what you can underwrite, basically meaning, you know, what kind of future financials you are, you know, predicting and forecasting the company to do and to say that this is what we think they're going to do. How much can we pay, you know, for this financial performance? You're doing, you know, a whole host of other diligence and, you know, tech diligence, legal diligence, HR diligence. It's a pretty exhaustive list. So by the time you, you know, submit your final bid, you pretty much know, you know, a lot about the company and you have a really good view of how you're going to kind of shape that company and, you know, help partner with them on their growth journey over the next, you know, five, 10 years.- And you are working on so many different parts. Did you feel, what did you feel like was your favorite part? Like you mentioned the financial modeling, there's so many different types of diligence you're doing, probably building out an investment memo as well. You're speaking with so many different experts and then you go to IC, eventually Investment Committee. Throughout all of that, was there any parts that you found to be the most stimulating, interesting, fun?- Yeah, I know. I don't know if there's any part I'd say is the most fun. I think one part I really enjoyed was doing customer calls. And I think those are just really illuminating to learn about a business when you hear firsthand from their customers. And of course it's blinded, they don't know who you are, but talk about their product. And I feel like, you know, when you have a really good company, you'll hear these customers raving about the product, talking about how they can't exist without the product and how it's critical to their workflows. And I think, you know, hearing that as from an investor perspective is music to your ears. I think that is one kind of area that I love to hear and listen in hopes of when you're making an investment, you're kind of hearing that positive feedback. But, you know, I'd say more broadly, I think all areas of diligence are really important. Do I have a favorite area? Not necessarily. Usually you're working pretty hard. And so I think the word favorite is probably not the one I'd necessarily use to describe that.- Got it, got it. And I guess on that note as well, you had wanted to work in private equity since you were, you know, pretty young, and then you finally made it. And at the same time, you're working really long hours. The work is not easy. I mean, how did you feel in those two-ish years you were at Warburg? I mean, were you going in each day with like a big smile on your face? Or, I mean, I'm sure there were tough moments, but now that you have kind of finally met your goal and your destination and all of that, how were those two years for you?- Yeah, you know, I have nothing but great things to say about Warburg, the firm, the culture, the group I was in. It was really a wonderful experience. And I think I was really ecstatic that I made it. It had been a long-term goal of mine. I think there was a lot of kind of, you know, happiness and almost this, some of the pride that I finally got. There was a lot of hard work, but at the same time, it's a hard job. You're working hard. And I think you alluded to all of that. And so I think there's kind of ups and downs, but overall I was really, you know, grateful that I was there and I was working there.- Can you then maybe share some of the pleasant surprises, like the good things that you did not expect as you worked in PE, and then also the unexpected challenges where you were in PE and as we had kind of discussed earlier on during our conversation, where we kind of detailed some of the things about banking that most people just don't know, now that you had been in the industry for a few years, you know, I think to preface a lot of this, private equity for those who want to work there often is very glamorized and people just see it as like the, one of the holy grails of finance and all of that. So could you share both sides and some detail that we may not be able to easily find on the internet?- Yeah, so maybe one of the pleasant surprises I'll share is a lot of the people you work with are really sharp. They have families, they're good people, and they understand that, you know, life doesn't revolve around answering your emails because you can. And so I think there's much more of an acceptance to say, hey, you know, we're going to work hard, but we're also going to play hard and whatever, you know, play hard means to you, whether it's spend time with your kids or your family, your loved ones, or, you know, go on travel, like they respect that. And I think that was kind of a nice paradigm shift where banking is a little bit more, you have to be, you know, on 24/7 to saying, you know, let's work a little bit smarter here. Let's kind of be very targeted with where we sprint rather than just trying to sprint, you know, at every deal. So I enjoyed that in terms of the, I don't think the surprises, I don't know if surprise is the right word, but you said it, like PE is glamorized. And I think people forget at the end of the day, it's still a demanding career and you have to work hard and kind of put your dues in. And you also have to really kind of refine that skill of investing. You know, I think in banking, it's fine to just kind of quickly learn how to, you know, make the outputs. And it's kind of pretty easy to, once you've learned the skills, to kind of be mindless in doing it. Whereas PE is much more active. You have to be very thoughtful. You have to be, you know, asking questions of, you know, what does this answer mean? You know, what inputs are driving this? And why is this the way? Is this good? Is this bad? How does this inform my decision? So it's much more kind of active and engaging for better and worse.- Yeah. I'm wondering how you might've felt maybe after you worked on a deal and you were, your firm is actually putting real money into it because as you mentioned, when you're in banking, you're working on slides. You'll go to the client and the client may kind of use that to decide to do an M&A deal or IPO. But ultimately, you know, you're, you don't have any skin in the game. What, did it feel different for you at all? When you, you know, you go through and let's say a buyout or something and you're like, holy crap, like now we're about to invest like tens of millions, hundreds of millions of dollars actually into this company where I did a lot of the diligence for. Can you describe your feeling when that happened to you?- Yeah, there's definitely a higher level of ownership of you kind of sitting there thinking, I hope, you know, my conclusions and what I think will happen to the company are right. And I think a lot of people are obviously, you know, kind of riding on this. A lot of people have kind of carry tied up in these, the fund and the deals. And so there's kind of a strong financial incentive for the firm to do well. But I think there is this little bit of, well, it's kind of the, you know, it's easy to buy the deal, but to have a great performing deal is, you know, much more difficult. So I think, you know, it's exciting when you win the deal, but still you have a long road ahead of you and kind of creating a great outcome and partnering with management to do so.- Yeah, and kind of on that side of, after you actually purchased a company, then you have to improve the company's cashflow and work with the management team and all of that. Can you describe how involved like you get? I know after you make an investment, it becomes like your portfolio company or your port co. And how much of your work then was kind of, so first, I guess, describing your work with your portfolio companies, and then second, how much of your work became new deals versus managing your existing portfolio companies?- Yeah, so it really depends on the kind of each associate. And that depends on, you know, each group and each firm does it a little differently. Some private equity firms have higher levels of engagement with their portfolio companies. Other have lower kind of levels of engagement. It also depends on the resources you have. Warburg has a really strong value creation team. And because of that, they could go to their portfolio companies and say, how can we help and support you? Do you need kind of a CFO help? We have excellent CFO resources. Do you need a pricing expert? Do you need tech help? We have all these resources. How can we kind of partner with you and partner with the existing resources to drive the company change? And each portfolio company is different as well. Sometimes they have different demands. Maybe they need, you know, kind of some help securing different financing. Maybe they need help on a tech build out. And so as the private equity associate, I think part of the job is being agile and being able to respond to whatever each portfolio company needs. Also making sure you have the right people there. Because at the end of the day, am I, you know, a tech expert in how to build a new tech product? No, but Warburg has someone who is. And it's important that that person is, you know, leading the change. And I'm kind of understanding, you know, what is happening and kind of what the updates are and making sure the deal team is broadly informed.- I've also heard that, and perhaps maybe at Warburg, this may not be as common, but I've also heard that sometimes if you have a portfolio company and it's not doing well, it could kind of really consume a lot of your work because you're constantly putting out fires every quarter. And it can be really tough for, kind of regardless of what level you're at, because now you've invested a ton of money, energy resources. Did you kind of, is there any truth to that? And maybe broadly in private equity, where just like really, for lack of better words, shitty portfolio companies can kind of ruin your life?- Yeah, I mean, I don't think I can comment for the whole industry as a whole. And particularly for Warburg, I think they're very good about supporting their portfolio companies and saying, you know, we're here for you, you know, through thick and thin. And they really try to do right by their investment and the people they partnered with. And so I think, you know, at any given time, the kind of demands on your time from portfolio companies can ebb and flow. And that's largely based off, you know, what's going on in the underlying market and what's going on for the underlying portfolio companies.- Then I'm also, I also wanted to ask about your, what you really feel like you learned throughout your experience at Warburg, because I've spoken with some investors recently, actually, who in the PE world, where they said, kind of learning about the art of the deal, like negotiation was like really pretty fascinating for them. I also took, as we had discussed earlier, advanced topics in PE class taught by a Warburg, I guess, investment professional. I don't know if, I don't remember what you call him, but he was like the head of something at Warburg. A very, very sharp guy. And interestingly, throughout the course, like what we do is we look at a company that Warburg had actually invested in back in 2012 or so. And then we kind of diligence it throughout the semester. And what I found really interesting was that, the company looked like a home run hit. So many good metrics, like good management team at the time, like running everything. And then it turned out that when it came to the real world, while it still did do well, it was more up and down than expected. And there are a lot of like macro and industry headwinds that were not expected. Overall performance, like the investment did well, but then the plan you make just never goes according to plan when it comes to like becoming your portfolio company and stuff. And that was like interesting to me, having been there for, worked in PE for two years, I'm sure you have a ton of other lessons. If you could share maybe like one professional, one personal kind of lesson you took away from the whole experience, I think that'd be great.- Yeah, on the professional side, I think the biggest thing I took away is that investing is a craft and it's a skill and it's something that you have to hone and it takes time, it takes effort. It's just like a sport, whether you're learning how to swing a golf club or shoot a three-pointer, it takes a lot of time to perfect that. And I think, oftentimes you think, you'll come into private equity and you'll be this all-star investor, but it takes time to really learn that craft and kind of hone that skill. And it's so important to learn from those around you and learn from those who've seen a lot more than you have. On the personal side, I also think it's important with just being kind of transparent and telling people how you're doing and how you're feeling, whether you're overwhelmed, whether you're wanting to work in a different space. I think, going from banking where it was sometimes, people were hesitant to voice how they're kind of feeling and maybe how their mental health is. I think it's important to remember that in PE, and from my experience, Warburg was very receptive to saying, "Okay, what areas do you want to work on? What do you like doing? How are you feeling?" They're very much more kind of smart with how they allocate resources and time. And I think that's an important reminder that end of the day, the people you work with are humans as well, and they want you to exceed and to be the best that you can. And I think sometimes we forget that when we're in these kind of, call it more advanced and kind of high-caliber industries. At the end of the day, we're all just people trying to make a living.- And on that note, actually, what were the work life, I'm sorry, what were the hours like for you at Warburg?- I think it really depended on if you're working on a live deal, kind of obviously like the broader macro headwinds, I think 2021 was crazy for a lot of people, but kind of 2022, 2023 were a little bit slower in terms of just where the market was in terms of deal volume, and also what was happening with portfolio companies and live deals and other work streams. So it really, it varied pretty considerably.- Okay, and do you have, this is kind of going more towards advice you have for people interested in private equity, and you kind of touched upon something I really liked where you said investing is really a craft. You seem to generally have a genuine interest in investing since you were young, and it's kind of carried through until now. I think sometimes a lot of people who want to go into finance, they maybe see things in the media, or they want to make a lot of money. And then once you're actually in the industry, you're like, oh, I actually really need to like this in order for me to actually succeed. Otherwise I'm going to hate my life every day. So I don't know, when you, if someone were to be interested in PE, banking, finance, what advice would you give them? You've already provided so much, but anything you might suggest?- Yeah, a few things come to mind. I think first and foremost, start early. I think the earlier you start preparing and kind of practicing, honing that skill and that craft, the better. And I think also just be dedicated. It's a marathon, it's not a sprint, and there's going to be ups and downs. You're going to see setbacks, you're going to see failures, but the way you respond to it is really what will set you apart. And I think the third point is there are so many different pathways to success. I think if you would have asked me when I was in college, I would have said the only pathway to success is banking and private equity. But I think where I am today, I would say, no, that's not the case. There's so many different pathways to success. And it might be a kind of the more traditional route. It might be a non-traditional route, but you have to first define what that success means to you and to figure out how to get there and realize that there's not just one pathway to success.- Yeah, I like a lot of what you said in there. And for the first one, quick comment that I totally agree. I think a lot of the people who do well in, let's say, any of these kinds of business industries or just careers in general, starting early is such a simple, but very, very important tip because I know when I was back in college, there were so many people who were smarter than me and more ambitious and whatnot, but they just didn't know that you needed to have, let's say, previous banking internships before you recruit for banking or know when the cycles were. I was fortunate to have older people tell me, but starting early, super help and super, super important. And then the second thing you mentioned where was it about being a marathon, not a sprint? I think, and there's multiple forms of success. I think all of those things are, oh, sorry. The second thing you talked about was, you're gonna run into some failures here and there. And I actually wanted to ask if you could share some kind of really big obstacle that maybe you overcame throughout your career so far that comes to mind.- Yeah, that's a good question. And you're really putting me on the spot here, I think, of a failure. I think I'm gonna talk about the standardized tests for business school. I remember starting studying the standardized tests. I ended up taking the GRE in undergrad. And I remember thinking, oh man, I was doing so poorly. I kind of put it on the shelf and it kind of loomed in the background of this fear of, I don't know if I can beat this test and get a good enough score to apply. Ended up starting doing it again during banking, during COVID when I was stuck at home. And again, I was just having such a hard time and I really felt like I was kind of repeatedly failing at this. And then finally, when I was a private equity associate, I made up my mind to apply to school and I knew I had to kind of overcome this test, this test that I think I ended up taking it far too many times more than I'd like to admit. But as really hard as that failure, I had to kind of like overcome that, really put forward a lot of effort to finally get a good enough score to where I can apply.- Yeah, and I took the GMAT and that was the biggest roadblock by far for me applying to school because I did just, did not want to take that test, especially, I actually took Manhattan Prep like a class back when I wasn't banking, but I had no time to do the homework. So like, I knew I was on the exam, but I just went to the classes. And then I think three years or so later, I, as I had more free time, like I started to study, but yeah, I totally feel you on that'cause I hated preparing for the GMAT and all of that. I was wondering, were there any other obstacles that you faced in banking or at Warburg in private equity that come to mind? And I will say like for me in banking, there were so many safety checks. Like if I did something wrong, which I definitely have done multiple, multiple times in banking, whether it's like putting in the wrong figures in like the trading comps or something, or like in the XL model, like missing in the DCF, like using like addition instead of subtraction, like having that, which really affects everything quite a bit. There were a lot of mistakes I would make, but my associate would always catch it. And then it was, by the time it got to the client, it went through four different people. So I'm curious for throughout your career, were there any kind of big mistakes that you kind of feel like you were able to overcome or were you in a similar situation where they were kind of check them?- Yeah, I think to your point, Ben, like we all make so many mistakes in our careers. And I think the important thing is, once you make a mistake, recognize it's a mistake to fix it and fix whatever needs to be done to fully right that. And then I think the most important thing is just learning from that mistake and making sure it doesn't happen. I think the way you respond from this mistake really kind of sets you apart and kind of differentiates yourself. And so I'd say, nothing, no one specific mistake comes to mind. I'm sure I've made plenty of mistakes, but I think the important thing is to just learn from those mistakes and to try not to make that same mistake next time.- Yep, got it. Okay, and last question I have for private equity before we kind of go a little bit into like school briefly, but AI is obviously like a huge topic in every single industry. So I wanted to ask, how you think AI may impact the private equity industry? And it could be anywhere from like diligence all the way to like taking over, building out financial models. Like I have my own opinions about it, but how do you see AI affecting the private equity industry?- Yeah, I think AI will make kind of the, it'll enhance the resources you have to come to the kind of the decision of, is this a good investment? And I think one way we're going to see that is in financial modeling. For example, there's a company called Mosaic. They do an LBO software. Warburg was an early adopter. I'm a really big fan of the platform and they are making kind of an LBO model that is very quick. You can punch in the figures, quickly tweak it, share it. It's kind of the, I call it the next generation of LBO modeling. And I think AI is only going to enhance the type of analysis that they're allowing you to do. And this should kind of shorten the timeframe that you need to come to a kind of a financial decision as well as, you know, on another hand, would it be interesting to see if you could kind of train like a large language model to recognize like a bunch of banker sims, what kind of like the top characteristics and qualities are to say, hey, here's what the algorithm they're saying are the businesses we should really look at. That'd be interesting. I clearly don't have the technical capabilities to do so. I think that'd be really interesting as I'm trying to build that.- Yeah, that's. I remember when ChatGPT first really like came out, there was a lot of, I even made a video about how AI will affect investment banking and stuff like that. And at the time I felt like a lot of times when you get, when you're working in banking or maybe in private equity, you're working with these management models that you have to kind of like check and make a lot of fixes to and stuff like that. And I wasn't sure when exactly an AI model or AI tool would actually be able to do, replicate everything. But it sounds like maybe at least for like the LBO modeling stuff things that are a little bit more kind of structured and doesn't need as much tweaking, I guess. It seems like those are kind of doing, those are a lot more possible. But do you think that let's say for the LBO models that you can build with Mosaic, like how detailed can you get with those? Have you, were you able to kind of look into that at all? Or is this kind of more just like you were able to see like rough prototypes that they have?- No, so I've used the product, used it pretty extensively. You can really, within minutes, create a full three statement LBO model. And then the beauty of it is you can export it to Excel if you want to tweak it or kind of add any other analysis that you'd like. But at the same time, you can share it through their software to your VP and say,"Hey, here's what kind of a quick LBO analysis on Mosaic is doing." And that VP can say, "Cool. I saw you're growing revenue at a 5% CAGR. Let's grow it at six and a half percent. What does that do for returns?" So it really kind of allows for like added flexibility, but also the possibility to just put it back in Excel and kind of fully customize it. And so I think that is probably the future of where financial modeling will go, just a little bit quicker, a little bit kind of easier to manipulate and share as well.- Yeah, yeah. And I think the interesting slash sometimes sad thing about finance is that tools help everyone get way, way more efficient, but the hours don't always decrease. Like I remember I talked about this back when I was in JPM, apparently like 40 or 50 years ago when they didn't have computers, you'd have to go to like the public library to get financial statements a lot of times, copy them, bring them back to the office, something like that. And now we have, you know, FactSec, CapIQ, Bloomberg, we can automatically get all the information, but it's not like our hours are necessarily decreasing. So that also maybe could be a good thing because it means like there's a future where finance people will continue to have jobs. So even with AI, so we'll see.- Yeah, I mean, I mean, yeah, it's great to see the productivity gains, but I'm sure a lot of junior analysts and associates really kind of just want the lifestyle gains, but we'll see.- Yeah, yeah, exactly, exactly. Moving on to kind of school a little bit briefly, you were in the industry that you had wanted to be in for many, many years and you decided to leave, come to Wharton, get an MBA. What made you want to make that decision instead of staying at the firm?- Yeah, so I talked earlier how, you know, I chose healthcare because it was the best group at J.P. Morgan, and I think that was true. And I, you know, when I got to Warburg, I similarly felt like the Warburg Healthcare Group had a really strong culture and kind of a great team. And so I chose, you know, healthcare again, but it wasn't until we were sitting at kind of a healthcare group retreat and we had a lot of the pillars of the healthcare industry and our advisors, and they were all talking about, you know, how they're going to change the healthcare industry, the trends they were seeing, and I really kind of noticed this underlying passion for the industry. And I realized that, you know, I didn't have that same passion for healthcare. I realized like I needed to, you know, switch to a different industry and I wasn't sure what industry that was. So I think kind of that desire to switch to a different industry of investing in, as well as a longstanding desire to get an MBA ultimately led me to apply, and I'm fortunate to have gotten into Wharton, which is here I am, where I am today.- Got it, and I totally feel you on the healthcare thing. Yeah, I went into JPM Healthcare because as you mentioned, it's just one of the best groups at JPM and Slash on the street, really good deal flow and all of that. And then I just remember always reading like, let's say equity research reports about like pharma, med tech, and all these like scientific words that I was like, I could read this a hundred times. I'm never going to get it as well as like my ED who has a PhD from UCLA or whatever. And I just, yeah, I didn't find the industry to be for me. But anyway, back to you, now that you're here at Wharton, I'm curious to know, you know, how your first year has gone so far. What has been like one of your top experiences if you could during this first year?- Yeah, I will say, you know, healthcare just takes a better brain than mine. So I'm glad that we share that sentiment. And a lot of those pharma words are hard to pronounce and I still don't understand how it works. In terms of Wharton, my favorite first year experiences, I went down to El Salvador with a few friends on a surfing trip. And I think we were there for about a week. We surfed pretty much three times a day. And then we kind of just ate food, slept, and surfed. And I think that was a really big highlight for me. It was fun to see this group of guys who'd come together from literally all over the world who shared this similar interest in surfing. And, you know, we were making a memory in a country I probably would have never visited. And it's a cool way to kind of expand your network through an activity that you enjoy.- Yeah, I've always actually wanted to learn how to surf. So have you been a surfer throughout your life or do you just kind of pick it up?- I'd say I'm an intermediate surfer and probably some real surfers out there would call me a bad surfer. I kind of just grew up doing it once or twice a year, spent a summer in Southern California where I went, I think, morning and night between work and then out in New York, I'd go a fair bit. So I'm a really an intermediate surfer.- Got it, got it. And is it similar at all to like snowboarding if you snowboard or?- Yeah, so it's somewhat similar. Snowboarding is my true love. Growing up in the mountains, I, you know, have been snowboarding for as long as I remember it. And it's the closest thing I've been able to find to like snowboarding and powder. Like once you're surfing, it's a very similar feeling. It is just, I can't describe it enough. It is like the best feeling in the world as you're, you know, like literally snowboarding in powder. It is just like a straight ecstasy, the feeling.- Got it. And when it comes to the professional side of things at Wharton, how has it helped you so far? I know it hasn't even been a full year yet, but how do you feel like it might've helped you on the professional side? And as in relation to that, like what are your kind of, what do you hope to do after Wharton?- Yeah, so I think on the professional side, the beauty of Wharton is there's just so many different opportunities. You know, any industry you're interested in, any, you know, location you want to go, there is firms that recruit from Wharton and there's just so many different opportunities that you can kind of help inform what you actually want to do. And I think I've really enjoyed having that pretty broad reach and kind of being able to tap into that Wharton network. It's certainly different from the BYU network. And I love the BYU network. It's very close knit, but the Wharton network is massive. And I think it really kind of carries a certain weight in the industry. In terms of kind of what I want to do next is, you know, I mentioned I wanted to shift away from the healthcare space and I think that's actively kind of process I'm going through and trying to figure out, you know, what industries I'm really interested in, passionate about. This summer, I'll be working for Anthos Capital, a growth equity firm in Santa Monica. So, you know, I'll be practicing my surfing out there and I'll be working on their tech team as well. So I'm excited to double click into the tech world and kind of go earlier stage than I went at Warburg.- Got it. So if you're doing growth equity now, are you hoping to, like, why did you make that switch from, I guess more, well, I guess you said Warburg was somewhat focused on growth as well, a little bit more than other PE shops. So maybe it was like a, not as big of a jump as let's say, just traditional buyout to growth equity. What made you make that jump to growth equity or are you just trying to-- I mean, I'll say Warburg does much more growth buyouts. So just think of kind of, you know, three or $400 million check sizes. Probably what most people would say is not true growth equity, but yeah. So Warburg is more growth buyouts. I think I'd always been interested in at least, like, thinking about going earlier stage. I didn't know if my personality or my skillset would lend it well. It kind of almost was this FOMO moment of, you know, if I don't try it, well, I kind of look back and say, oh, why didn't I try doing something different? You know, I know what kind of private equity is like. Let me try a different flavor of private market investing and see if it's something I like more or if it's something I dislike. But I'm really excited about Anthos and I'm really excited to try the growth equity space, particularly with Anthos.- Yeah, I mean, it seems like you have really kind of carefully thought about a lot of your career so far. And it seems like, I would imagine you put a lot of thought into like your recruiting process and this firm. So yeah, hopefully we can catch up in like, you know, a year or so and see, or less, and see how you ended up enjoying that experience. And I do have like some just finals, little random fun questions for you.- I will say, I think it's much more of a rollercoaster and you're just kind of seeing the polished picture. So it's up and down just like everyone else does.- That's always true, yeah, yeah. I have a ton of battle scars as well. From my entire experience and yeah. But I, yeah, I did have some kind of more random, fun little questions to end the whole conversation. But one is kind of, if you were in an alternate universe and you weren't going down the finance track, what would you be doing?- I think I'd for sure be in some mountains somewhere, probably snowboarding and rock climbing. I love to do that in my spare time, but you know, and living in New York City, it's hard to do those things. And I will for sure, hopefully not have any of the PTSD and chills from the standardized testing. Just saying GRE or GMAT gives me chills.- Yeah, it sounds like it was like a tough experience for you and yeah, it is for a lot of people, I gotta say. Next one is, who is like a very influential mentor that you had, if you had one or someone you've looked up to and how have they kind of helped you throughout your life?- Yeah, you know, I think there's two people come to mind. I worked for them, they're kind of fresh Stanford graduate, Stanford GSB grads at this private equity firm in Utah. I worked for them for a year and I was just almost captivated by their way to kind of command attention and ability to influence others. You know, we would talk with these CEOs as we were kind of looking for businesses and these CEOs would just gravitate to these two guys. They were great at kind of gently, you know, making fun of themselves, quickly building relationships of trust. I remember just thinking like these two guys are so good with people and they were really great mentors, probably some of my two favorite bosses that I've ever worked for.- Amazing, yeah, and I think especially when you're young, it's so important to work with people who are not only smart but willing to kind of help you out. And I feel like during my career, earlier on in my career, those people who really kind of looked after me made a huge impact on like,"Oh, this is what a great boss looks like." Versus having also, which is in retrospect a good experience to having not so great bosses, you're like,"Oh, I don't want to be like these people."- Yeah, and I think my favorite thing about them is they didn't take things too seriously. They realized that this was a job and we worked in private equity, but at the end of the day we could laugh and there's something to be said about, you know, laughing at a situation and moving on from it.- Yeah, yeah. Last two questions. One, what is your most high conviction contrarian opinion?- Oh man, I think, can I have like a skip card or a friend card on this one? I don't know. I think I'm, I don't know if I have a great answer for you on a contrarian view. Give me some time, next interview, I'll have a better answer for that.- Okay, sounds good, sounds good. And then last one is, you've already actually provided a lot of great career advice and personal advice throughout a lot of your stories as well. If you could go back though to your like 15 year old Connor, what would you tell him? And so like, what kind of advice would you give to your former self when it comes to, not just professional and career stuff, but also on the personal side?- Yeah. You know, I think one of the most important things is, and I said this earlier, is just to kind of define what success looks like for you. And I think success is different for each person, whether it's kind of from a personal, professional, you know, family life or religious, whatever it looks like, I think you need to define success. And then also realize that there's so many different pathways to success. You know, if it's acquiring wealth, which I'm sure a lot of people watching this might be, you know, wealth focused, they want to work in banking, you know, there's so many different ways to generate wealth. Is it helping out your community? Is it, you know, working in a certain industry? There's so many different pathways to success. I think it's important to understand, you know, what is most important to you, like an individual on a fundamental level.- Well, I think that's a great way to kind of end the whole conversation. And thanks so much again for your time. Yeah, thanks so much, Connor.- Awesome. Thanks, Ben. Glad to be on.- Thank you. All right, so that concludes the episode. I hope you all enjoyed this discussion that I had with Connor. And I kind of wanted to double click and highlight a key takeaway for me, which is just how important it is to be prepared. As I kind of listened to Connor's story, it really just kind of amazed me how he was able to set a goal and was able to take a lot of baby steps to eventually get to that goal. And I think that's just a big lesson in itself, right? It doesn't matter if it's more on the personal side for you or professional, but if you have some kind of goal and you actively make efforts each and every day or month, year to kind of get to those goals, then it is achievable, right? And so I think that is a huge takeaway for me. I'm going to definitely think about, you know, what are those kinds of long-term goals I have in the future that I need to slowly work towards every day? And that was a key kind of takeaway for me. As I mentioned, hope you all enjoyed this interview and episode. I hope to catch you all in the next one. Thanks so much, guys, and peace out.(upbeat music)(upbeat music)