Private equity is a hot topic. Finance has traditionally dominated the MBA Jobs world and private equity careers are sought-after by more and more business school grads each year.
According to QS Top MBA, median figures for MBA salaries in the finance sector are over $100,000. At top US business schools Chicago Booth and Columbia, a high of 35 per cent and 38 per cent (respectively) of their 2013 MBA cohort went into finance careers after graduation.
Competition is fierce by virtue of the work and launching a private equity career can be a tough nut to crack.
So Dirk Holshausen, a 2013 MBA graduate from Saïd Business School who broke into CDC Group – the leading private equity firm that invests in businesses in some of the world's poorest places – has wealth of knowledge to share about the finance sector. He also knows what it takes to break into the firm.
Opportunities at the company are vast and many employees have MBAs from top business schools around the world. CDC candidates can come from a wide range of backgrounds – it’s not just private equity experience that will land you a job at the firm.
An entrepreneurial mind-set will put you in good stead – as will a passion for emerging markets. CDC’s mission is to support the building of businesses throughout Africa and South Asia, to create jobs and make a lasting difference to people's lives in some of the world's poorest places.
Their portfolio of investments is valued at £2.25 billion and last year these companies together employed 1,109,000 people.
CDC employees are passionate about improving the quality of life for those in poor countries and the firm presents a unique opportunity to work in private equity while doing social good.
Dirk explains why private equity is a buzzword at the moment, and details the career opportunities available for MBAs at CDC.
How would you describe CDC?
CDC is the first ever development finance institution (DFI), established in 1948. Wholly-owned by the UK government, it is part of the Department for International Development’s (DFID) private sector strategy to alleviate poverty, but operates independently under the governance of an independent board.
CDC aims to achieve positive impact where we invest, primarily by creating jobs, while also achieving a fair return on capital.
What does CDC do?
CDC supports the growth of businesses across all of Africa and South Asia – with a particular focus on the harder places.
We aim to invest where our job creation focus can have the greatest impact: in countries where the private sector is weak, and in sectors where growth leads to jobs – directly and indirectly – such as manufacturing, agribusiness, infrastructure, financial institutions, construction, health and education.
We invest in all sizes of business from the micro-level right up to the largest, because we believe that a balanced private sector is necessary for economic development.
What is your exact role with the company and how long have you been there?
I started with CDC a few months ago after completing my MBA. My role is to work with the deal teams and develop a strategy for CDC to build human capacity in its investments, alongside providing financial capital.
The lack of human capital (skills at all levels) is often quoted as one of the three largest barriers to economic progress in Africa, alongside access to financial capital and access to power.
CDC had traditionally made the provision of management and technical skills a central part of its strategy. And today there is an incredible opportunity to once again work alongside investee company management teams to boost their performance.
What career opportunities are there for MBAs at CDC?
CDC is at a really exciting stage in its history. The company has recently returned to direct investing, while maintaining its fund of funds capability, and the teams are growing.
Many of my colleagues have MBAs from top business schools around the world and cover roles ranging from microfinance to direct debt and equity investing, to managing our fund of funds team.
As the anchor investor in many African and South Asia funds and with a portfolio of over 1,200 companies across these regions, CDC is never a dull place to go to work!
What would an ideal CDC candidate look like?
It's difficult to describe an 'ideal' CDC candidate. Our team of more than 100 investment and operating professionals bring a range of varied yet complementary skills to the table; many are entrepreneurs, some are deal makers, while others possess excellent commercial and operating experience and acumen.
They all share one thing in common - an entrepreneurial mind-set, a strong belief in CDC’s development-focused mission and a keen understanding of the need for rigor in the way businesses operate in emerging markets.
Many of my colleagues have grown up in these markets and have deep local networks, and a solid understanding of the business environment we are investing in.
Do you have any tips for the interview process?
Ensure you have the basics nailed. And then spend as much time as you can speaking with people inside the firm to get a feel for the culture.
Every company has a slightly different 'feel' and having to choose between a pool of exceptional candidates comes down to fit.
What is the main difference between investment in developing markets and more established countries?
Developing markets are inherently fluid, fast-growing and exciting places to do business – but definitely come with their own set of challenges.
CDC's mandate, to be at the forefront of investing in difficult places, means that we really need to have built meaningful relationships and have a thorough understanding of the local market in order to make successful investments.
There have been reports of a flat year in the private equity industry – what challenges does the firm face in 2014?
While the global markets have faced a difficult year, Africa and parts of South Asia continue to attract increasing levels of interest and investment.
CDC is well positioned to continue to work alongside local companies in these markets. As a balance sheet investor we are also able to take a long term view and support our investee companies with patient capital.
The natural ups and downs of the industry therefore affect us far less.
There is intense competition in private equity – how does CDC remain competitive?
Fortunately, having a heritage of investing successfully in emerging markets for over 60 years gives us a solid starting point. But CDC remains far more collaborative than competitive.
Our direct equity and debt teams regularly co-invest with other private equity firms, and our fund of funds team backs over 80 independent fund managers.
We are focused on developing the private sector in the markets we serve and have found that being inclusive and collaborative is a far more effective way of continuing to build successful businesses.
To find out more about the career opportunities at CDC Group, click here.
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