Hiring Circle meets Gessica Howarth, Investment Manager at CBPE: Part 1

Subtitle

Gess speaks about her career journey into Private Equity and advice for anyone making the move.

Gess Howarth

Georgie Banfield

You began your career in investment banking at Goldman Sachs but after 4 years you moved to Private Equity, firstly to Rutland Partners and ultimately to CBPE.  Please can you tell me about the decisions you made in the early stage of your career and why you made that move to the buyside.

If I'm honest at the beginning of my career I didn’t do too much thinking about other options – I vaguely knew I wanted to get into finance based on a few courses in my degree and friends in the industry, but when you're 21 / 22 you don’t appreciate the various areas within finance; what they do and what you will be best suited to.  That’s one of the most difficult things that graduates face at the beginning of their career and are forced to make the decision around which area of the industry to enter without being familiar with financial markets and the different subsectors.  While I appreciate it is probably quite hard now for graduates to get into their careers due to Covid restrictions etc, back then it was relatively easy - all the banks and accounting firms came to university and did the “milkrounds” etc. so while studying Maths and Statistics at Oxford I was able to gain exposure early on and did a couple of Spring Weeks – one at Morgan Stanley and one at Goldman Sachs.  Following graduation, I returned to GS as an intern in their investment management team before joining full time in the multi-asset investment team (“Global Portfolio Solutions”) in 2014. 

The main thing I wanted from my career was to continue learning – as soon as that stops, it’s the moment I know it’s time to move on. 

Working in the MA investment team at GS was a great place to start my career because it gave me a good overview of all financial markets.  I really enjoyed being involved in the whole investment process; forming an investment thesis, deciding what your portfolio would look like and justifying and defending it to the investment committee, and then on the other side, managing that portfolio. 

The reason I stayed for quite a long time was because I enjoyed it so much – it was such a great opportunity to learn.  The main thing I wanted from my career was to continue learning – as soon as that stops, it’s the moment I know it’s time to move on.  I had realised I wanted to be more on the micro scale but still be on the investment side so the main options were Hedge Funds and Private Equity.  For me PE was the obvious answer - with Hedge Funds, in many cases you're still on the public side and you don’t have the same proximity to investment companies as you do with PE.  With PE you are working with individual companies and helping them achieve those returns that you are betting on so it’s not just an arms-length decision on whether the company is good based on public information.  I knew this from a combination of desktop research and knowing people in the industry who had made similar moves.  So I moved into the banking side of GS in order to gain the skillset and credentials to get into PE.  It wasn’t the only method – there are a number of routes to get into PE for example from accounting or consulting, but this was the best way for me given I was in an investment bank already.

Making the move from a bank such as Goldman Sachs to a smaller mid-market fund like Rutland Partners in quite an unusual choice.  What made you choose Rutland and the mid-market at this point?

Yes I think most people would tend to move from GS to a large-cap, traditional, well known firm like KKR / CVC etc.  Not many move to the mid-market from that level and it was probably the main thing I had to justify in my interviews both at Rutland and at CBPE.  What I liked about Rutland was that it was a special situations fund.  I hadn’t been in banking for long when I moved and I wanted something more complex and hands-on that you get with special sits – it gets you more involved with these businesses and allowed me to dig into many of the fundamentals that you would take for granted when you're dealing with a company that’s more polished and clean. 

I think having this holistic view allows you to make a lot more intuitive and informed decisions and that’s what attracted me to the mid-market.

I also chose the mid-market as it gave me the opportunity to work in all areas of the business; obviously there are exceptions but on the whole the day-to-day at a larger fund is more like working at another bank – you'll be working on one or two narrow streams of the deal and you won’t get the overall picture.  I didn’t want that.  If you compare that to a Rutland or a CBPE however, you are dealing with leaner teams – you’ve probably got one person at each level of seniority on each deal.  That means you get exposure to all elements of the deal (all the diligence streams, alongside management interaction and the financing process etc.).  I think having this holistic view allows you to make a lot more intuitive and informed decisions and that’s what attracted me to the mid-market.

One of my key strengths, and indeed what I enjoy most, is working with management teams and the relationships you develop with them.  You get to do that at a much more junior level in the mid-market.  For example, at CBPE in the first few weeks I was meeting management teams.  To go to a board meeting in a large-cap fund you would likely have to be more senior.  It’s a very different dynamic – it is definitely what people should think about when deciding which area of the market to move into.

You joined CBPE in June 2020.  What was it about CBPE that attracted you?

I was at Rutland for 2 years.  I had enjoyed my time and learnt a lot, but once I had decided to leave, I took my time and interviewed with a lot of places.  There are a number of reasons why I chose CBPE.

Firstly, it was the sector breadth of the fund, particularly their focus on tech and healthcare.  These are areas I'm interested in and didn’t have a great deal of exposure to at Rutland, but I also think they are doing well and positioned to do well in the future.  Having that breadth of knowledge versus an in-depth sector-specific focus is very specific to different people but for me I like having that broad knowledge, at least at this stage of my career.   It also lends itself to variety - one day I’ll be working on a software company, then pharma, then a chemicals business.  It also makes for quite interesting conversation!

Secondly there is the ability for us to do bottom-up origination.  We have the autonomy to do that alongside our deal work.  It’s great to have that balance, especially when you’re not flat out on a deal.  It’s more of the entrepreneurial side and again it’s not something that everyone likes doing, but as a proactive person, that side of the job is really rewarding for me.  It positions you well for your climb to the top because when you get to Partner you want to be someone bringing in deals – so having that origination capability and industry knowledge is key. 

I truly believe the personalities and culture resonates with management teams and is what wins us a number of our deals. 

And finally, it was very much about the people and personalities.  I can honestly say that CBPE are some of the best people I've worked with in my career; down to earth, respectful but not overly hierarchical, super intelligent but without arrogance.  We are quite well known for our people – we gel well and that is a key part of our reputation alongside having strong performance. 

I truly believe the personalities and culture resonates with management teams and is what wins us a number of our deals.  It really is a partnership and you have to have that chemistry in order to do that. 

A lot of people talk about wanting to get into Private Equity.  What was it for you that attracted you to the industry and what advice would you give to someone looking to forge a career in PE now?

People rush to get into Private Equity.  There are clearly financial benefits, and it is known as being more of the elite side of the financial sector and that’s one of the goals people have.  The carry model is one of the main reasons on the financial benefits side that people are attracted to but the reality of that means that it’s a long-term game.  It certainly makes you think about whether it’s something you really want to do for the next 10 years.  But when you're at university, people mash together their version of the truth without finding out what the day-to-day is and the types of different funds. 

The main thing I drill into people who ask me my advice is to meet and speak to as many different people as possible and choose the one that best suits you. 

Whilst there are some PE funds that hire graduates, I personally don’t think it’s a good idea to move into the industry straight from university, largely because I think getting some industry experience and an understanding of the fundamentals is important to developing your skillset.  This could be through accounting, banking or consulting (to name a few) – they all have their merits.  It depends on the individuals and what your personality is.

Don’t choose the biggest brand or the one that you think is most prestigious without doing your diligence as the day-to-day and team dynamics might not be what you want.

The main thing I drill into people who ask me my advice is to meet and speak to as many different people as possible and choose the one that best suits you.  It’s a competitive industry so you’ll end up applying to many different funds.  Don’t choose the biggest brand or the one that you think is most prestigious without doing your diligence as the day-to-day and team dynamics might not be what you want.  What a lot of people tend to forget is that interviews are a two-way process and to use those opportunities to ask questions and figure out if ultimately it is a place you’d like to work.