Private Equity Career Profile

Discover your private equity career path.

Private Equity Career Profile

Private equity overview

Private equity (PE) is a common career progression for investment bankers (IB).  Analysts in IB often dream of “graduating” to the buy side, where they are many advantages, but hours are still extremely long and require extensive financial modeling work.  Roles in private equity are less client facing / sales oriented than investment banking, however senior principles at PE firms do a lot of fundraising which can involve a lot of relationship management.

Read more: buy side vs sell side

 

Personality

The personality of someone suited to work in private equity on the buy side typically has the following character traits:

  • Highly ambitious
  • Competitive
  • Detail oriented
  • Quantitative
  • Polished and presentable

 

Interview prep

Interview prep is critical for landing a job in PE.  There are three main categories of questions in PE interviews: behavior, technical, and prior deal experience.  For behavior and technical questions, please see our investment banking interview guide, which will bear a strong similarity to the types of questions you’ll be asked.  When talking about your deal experience you should mention them in a similar way to how you write them on your resume.  Start with a summary describing the main deal / overview, and then diving into 2 or 3 key issues or pieces of analysis that you played a big role in, and how they impacted the outcome of the deal.

 

Entry point

There are two main entry points into private equity: investment banking or an MBA program.

Associates are recruited from top MBA programs.  They may or may not have prior banking experience and typically stay 2 to 3 years until they will be promoted to VP, or move on to something else.

Associates are also recruited from investment banks where they can easily be slotted in to do a lot of financial modeling and valuation.  They similarly stay 2 to 3 years until they will be promoted to VP, or move on to something else.

 

Exit strategy

Analysts typically try to move up and eventually become principles in the firm.  Alternatively, after gaining enough experience some may leave to start their own firms or acquire operating businesses.  May ex-PE people own and operate small to mid sized businesses.

 

Compensation

Below is a guideline of how much you can earn in IB.  It should be noted that there can be a wide range based on the bank, the year, and the city you’re working in.

Associate: $200,000 to $300,000 (base salary plus bonus)
VP/Director: $300,000 to $600,000 (base salary plus bonus)
Principal: 1,000,000+

 

Private equity course work

Taking investment banking courses can be an invaluable way to learn what’s required on the job, before you get hired.

It’s important to start with a solid understanding of accounting fundamentals.  Next you should have a solid Excel crash course under your belt, which will teach you the basics including shortcuts, formulas and functions.  From there you can progress to financial modeling courses, which will be the basis of your day to day job in IB.  By taking a few courses you’ll learn about various industries and see different types of model.

If you want to save money, your best bet is CFI’s Full Access Bundle.