TCLA Vacation Scheme Applications Discussion Thread 2021-22 (#1)

[Zubin]

I would always recommend refining and updating your application answers for things that are not static. That will include your career motivation and also possibly any competency answers, as you may now have stronger examples.

I also think you can always go back and critically evaluate what you write to see if it can be written in a more concise/persuasive/well structured/accurate way.

Thank you for your insightful response, Jessica!

I understand some examples will be replaced with newer ones. But aside from improving the conciseness/persuasiveness/structure/accuracy of my answers, it is no hindrance to my application to draw upon the same experiences and learnings in a subsequent application to the same firm, right?

 

[Dwight]

A PE house is a PE firm, funds are basically discrete pools of investment capital set up and managed by the firm.

I'm more familiar with the corporate side of PE than the fund side, so the rest of what I'll write is probably not a perfect explanation but I don't think anything is outright wrong (happy to take correction, however).

Funds will be set up as limited partnerships or similar, and are basically the nexus of time-limited commitments, by a defined set of investors, to contribute a defined amount of capital over the life of the fund.

Investors (and the PE house) own stakes in the fund, and the fund owns the various topcos set up to make investments, which in turn own the midcos, which own the bidcos which own the opcos.

Sometimes individual investors who are already involved in the fund will make additional investments in a given acquisition and invest at topco, but that's entirely distinct from their investment in the fund.

All of this is set up to be very tax efficient.

Thank you for your input, @Rob93.

Just a quick follow up: is there a category name for these companies? I can vaguely remember such a phrase with the word 'vehicle' (EDIT: I believe an SPV?).

My understanding is more so from the fund side, so I'll explain what I know since your understanding is more from the corporate side. Hope it helps!

A PE fund, as you mentioned, is owned by the PE firm and is set up as a limited partnership.
This limited partnership is ran by two key groups of people: (a) general partners; and (b) limited partners.
The limited partners are those that provide the (most) capital (e.g. high-net-worth-individuals, pension funds, insurance funds). The general partners are managers that ran the day-to-day operations of the PE fund.

The critical difference between a GP and a LP is in relation to the extent of liability when things, in essence, don't work out (financially speaking). Maybe an LBO does not yield the expected financial outcome. The GPs are burdened with unlimited financial liability (i.e. there is no limit to the amount they will have to pay out if, for example, an investment doesn’t work out). However, the liability of a LP is limited to the amount of capital they contributed to the fund.

Also, don't forget the classic 2/20 split for general partners. 2% management fees and 20% performance fees (i.e. 'carried interest' - this is how it is usually referred to in the papers).

Apologies if you already have this knowledge and I have insulted your intelligence - you mentioned that your funds knowledge wasn't as strong and you wrote a helpful post to my question too.

 

[Jessica Booker]

Thank you for your insightful response, Jessica!

I understand some examples will be replaced with newer ones. But aside from improving the conciseness/persuasiveness/structure/accuracy of my answers, it is no hindrance to my application to draw upon the same experiences and learnings in a subsequent application to the same firm, right?

They may not even have access to the old application so they may not be able to compare it.

Just make sure your application demonstrates elements of continuing to pursue the career/learn/develop since your last application. If everything was the same or everything seemed to not be that recent, a firm could question why the outcome would be any different this time around.

 

[sarahlynn729]

Hi guys - for Davis Polk, do you attach your cover letter or is it the body of your email your cover letter? If you attach your cover letter, how would you set out the email?

 

[tc.la.vs]

Another cycle, another streak of rejections. People are getting ACs at HSF, HL, Links, S&M and I applied ages ago, which most likely means a bunch of PFOs for me. Have also already been rejected from 9 other firms. I have a CV with a vac at an MC, two insight schemes, citizens legal advice volunteering, full-time work in restaurants over the summer, internship at a famous think tank, leadership positions, a 1st class degree, speak 4 languages, but to no avail. I even get my apps reviewed and edited by friends who work at the firms I am applying to - several of them are shocked I am not even getting VIs/WGs/TIs. I definitely don't think I am entitled to a job, but it does feel a bit strange I don't at least get a chance to show what I am capable of in an interview. If they want to reject me at that stage - fine, at least then I know they rejected me after giving me a fair chance.

I see the alt-right trolls lurking in the Legal Cheek comments going on about reverse racism and preferences always being given to women and minorities for jobs. I don't believe in that bull at all, but as a white, working-class Northerner male it is sadly quite tempting to make your mind wander towards cynicism when your peers with far less impressive CVs and worse grades seem to breeze through the application process (many of them have shown me their apps, so I am not throwing wild assumptions here).

Re the first paragraph:

everyone has said really useful smart things so I will just add - 1) its not a PFO until its a PFO: its so shit the waiting and impending rejections but just focus on new applications and try to boot the submitted ones out of your mind as much as possible. just got to wait and see. 2) its often a bit of a numbers/luck game. All of my friends with TCs got rejected by 15+ firms before they got the one offer. I try to keep this in mind so hopefully it might help you as well. someone will say yes at some point if you're trying really hard, getting feedback from firms (where possible), and going to lots of open days/talks/presentations.

 

[John Doe]

Hi guys - for Davis Polk, do you attach your cover letter or is it the body of your email your cover letter? If you attach your cover letter, how would you set out the email?

Hi, I think the most appropriate way would be to attach your covering letter as a PDF. With a brief text in the email explaining your purpose and what you have attached, etc.

 

[tc.la.vs]

Hi I formatted it like a normal cover letter (I did the first year scheme with them and they said to do this), and I think it should be no more than a page long ideally. Hope that helps

yikes mine was a bit longer oops - hoping they don't cull me just for that 😬

 

[sarahlynn729]

Hi, I think the most appropriate way would be to attach your covering letter as a PDF. With a brief text in the email explaining your purpose and what you have attached, etc.

Thank you so much!!!

 

[littlecat]

Does anyone have any thoughts on how to answer this question for Bates Wells:

In 2015 Bates Wells became the first UK law firm to be awarded a B Corp status. If successful, how would you help the firm continue to be a socially responsible organisation?

I think it is focused on CSR, but I'm not sure how to begin answering it.

 

[anon123456789]

Does anyone have any thoughts on how to answer this question for Bates Wells:

In 2015 Bates Wells became the first UK law firm to be awarded a B Corp status. If successful, how would you help the firm continue to be a socially responsible organisation?

I think it is focused on CSR, but I'm not sure how to begin answering it.

So the way I approached this question was more focused on that last part i.e. "how would you help the firm to continue to be a socially responsible organisation?". It's not directly asking how you would help the firm maintain its B-Corp status specifically, but more enquiring as to your own values and how you would continue to harness these at Bates Wells to help drive CSR. If that makes sense.

I did open my answer with a reference to B-Corp status as I wanted to demonstrate my understanding of it but then the rest of my answer lead into talking about my previous volunteer work, how I continue to be social responsible alongside my other commitments, followed by how this would add value to Bates Wells specifically based on their various commitments to social responsibility I found through research.

I hope this gives you some idea of where to start! I got invited to WG which means I passed the initial screening stage so I guess it is a least somewhat relevant 😭 😭

Also feel free to PM me if you want to discuss anything else regarding Bates Wells apps, would be good to have a support network

 

[Rob93]

Thank you for your input, @Rob93.

Just a quick follow up: is there a category name for these companies? I can vaguely remember such a phrase with the word 'vehicle' (EDIT: I believe an SPV?).

My understanding is more so from the fund side, so I'll explain what I know since your understanding is more from the corporate side. Hope it helps!

A PE fund, as you mentioned, is owned by the PE firm and is set up as a limited partnership.
This limited partnership is ran by two key groups of people: (a) general partners; and (b) limited partners.
The limited partners are those that provide the (most) capital (e.g. high-net-worth-individuals, pension funds, insurance funds). The general partners are managers that ran the day-to-day operations of the PE fund.

The critical difference between a GP and a LP is in relation to the extent of liability when things, in essence, don't work out (financially speaking). Maybe an LBO does not yield the expected financial outcome. The GPs are burdened with unlimited financial liability (i.e. there is no limit to the amount they will have to pay out if, for example, an investment doesn’t work out). However, the liability of a LP is limited to the amount of capital they contributed to the fund.

Also, don't forget the classic 2/20 split for general partners. 2% management fees and 20% performance fees (i.e. 'carried interest' - this is how it is usually referred to in the papers).

Apologies if you already have this knowledge and I have insulted your intelligence - you mentioned that your funds knowledge wasn't as strong and you wrote a helpful post to my question too.

I did know most of that but not insulted in the least, always good to share information. And everything in the corporate holding structure of a given acquisition will be a special purpose vehicle (SPV) - funds I guess also but it seems like more precise language (or just 'fund') is usually used in that context.

Would be careful with the GP liability point though - I don't think that GPs are on the hook for the financial liabilities of operating companies, there are many many discrete corporate entities with limited liability in between the GP and the opco. I'm fairly certain you could bankrupt a portfolio company and walk away unscathed, that liability shouldn't reach into the rest of the fund, much less the individual partners. I think PE firms will sometimes get dinged on regulatory grounds for opco activities, but I'm pretty sure they aren't liable in a broad sense for their portfolio companies.

 

[Dwight]

I did know most of that but not insulted in the least, always good to share information. And everything in the corporate holding structure of a given acquisition will be a special purpose vehicle (SPV) - funds I guess also but it seems like more precise language (or just 'fund') is usually used in that context.

Would be careful with the GP liability point though - I don't think that GPs are on the hook for the financial liabilities of operating companies, there are many many discrete corporate entities with limited liability in between the GP and the opco. I'm fairly certain you could bankrupt a portfolio company and walk away unscathed, that liability shouldn't reach into the rest of the fund, much less the individual partners. I think PE firms will sometimes get dinged on regulatory grounds for opco activities, but I'm pretty sure they aren't liable in a broad sense for their portfolio companies.

Thanks for flagging up, @Rob93.

Oh, I read otherwise on a TCLA article sometime ago. I think the key point I was trying to get across anyways was the LP liability point.

Also, I have read contrasting definitions of PE from different sources. Sometimes they say that the capital is invested into private and public companies, but other sources say only private. Which is true? Isn't the 'private' in 'private equity' just meant to denote that the capital is raised privately, but investment can (and is) be made in public (listed) as well as private (non-listed) companies.

 

[Rob93]

Thanks for flagging up, @Rob93.

Oh, I read otherwise on a TCLA article sometime ago. I think the key point I was trying to get across anyways was the LP liability point.

Also, I have read contrasting definitions of PE from different sources. Sometimes they say that the capital is invested into private and public companies, but other sources say only private. Which is true? Isn't the 'private' in 'private equity' just meant to denote that the capital is raised privately, but investment can (and is) be made in public (listed) as well as private (non-listed) companies.

PE is properly characterised by the equity itself being private - this is a fundamental difference between a PE firm and an equity-focused hedge fund or asset manager.

That said, big legacy PE firms will now get involved in private credit, PIPEs, SPACs, real estate, all kinds of stuff - I'm always tempted to refer to 'alternative investment firms' on apps as it's a more accurate description of most of those firms today, though a bit unwieldy and eats into the precious word count.

 

[Asil Ahmad]

Thanks for flagging up, @Rob93.

Oh, I read otherwise on a TCLA article sometime ago. I think the key point I was trying to get across anyways was the LP liability point.

Also, I have read contrasting definitions of PE from different sources. Sometimes they say that the capital is invested into private and public companies, but other sources say only private. Which is true? Isn't the 'private' in 'private equity' just meant to denote that the capital is raised privately, but investment can (and is) be made in public (listed) as well as private (non-listed) companies.

Correct me if I am wrong here but most of the times PE firms invest in public companies and then make them private but the only time they become public after PE acquisition is through a SPAC. I don't have that much knowledge of PE so correct me, anyone, if I am incorrect.

Also, an example of a public company becoming private is the Morrison acquisition by PE firm Clayton which happened this year.

 

[violeta]

Anyone received ES VI invite?

no I haven't heard anything yet - have you? which office did you apply to?

 

[Daniel Boden]

Thanks for flagging up, @Rob93.

Oh, I read otherwise on a TCLA article sometime ago. I think the key point I was trying to get across anyways was the LP liability point.

Also, I have read contrasting definitions of PE from different sources. Sometimes they say that the capital is invested into private and public companies, but other sources say only private. Which is true? Isn't the 'private' in 'private equity' just meant to denote that the capital is raised privately, but investment can (and is) be made in public (listed) as well as private (non-listed) companies.

It can be both yeah, PE firms can do what are known as 'take privates' or public-to-private transactions where they buy a public company and make it a private company but these aren't as common as the perhaps more traditional private transactions.

 

[Rob93]

Correct me if I am wrong here but most of the times PE firms invest in public companies and then make them private but the only time they become public after PE acquisition is through a SPAC. I don't have that much knowledge of PE so correct me, anyone, if I am incorrect.

Also, an example of a public company becoming private is the Morrison acquisition by PE firm Clayton which happened this year.

Not only SPACs, PE firms will occasionally float a company on IPO but they generally can't liquidate their position as quickly that way so prefer not to, as their performance metrics (and pay) are time-sensitive.

 

[Daniel Boden]

Correct me if I am wrong here but most of the times PE firms invest in public companies and then make them private but the only time they become public after PE acquisition is through a SPAC. I don't have that much knowledge of PE so correct me, anyone, if I am incorrect.

Also, an example of a public company becoming private is the Morrison acquisition by PE firm Clayton which happened this year.

The more traditional route of taking a private PE portfolio company (i.e. a company owned by the PE fund) public is through an IPO rather than a SPAC but they achieve the same goal more or less

 

[Asil Ahmad]

Not only SPACs, PE firms will occasionally float a company on IPO but they generally can't liquidate their position as quickly that way so prefer not to, as their performance metrics (and pay) are time-sensitive.

Thank you for this and I see where you are coming from.

 

[Asil Ahmad]

The more traditional route of taking a private PE portfolio company (i.e. a company owned by the PE fund) public is through an IPO rather than a SPAC but they achieve the same goal more or less

Thank you for this it is really insightful.