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Starting a career in private equity

Private equity (PE) companies raise capital from investors outside and use it to buy businesses, increase the efficiency of their operations, and then sell them for a profit on the investment.

The investors include insurance companies pension funds family offices, endowments funds-of-funds, high-net-worth individuals. Private equity professionals make profit for their companies as a result of the business’s operations. In short, the experts work involves fundraising, operational management and investment.

Let’s look at the path to career for PE professional here.

Making a move into private equity

The candidate must be a graduate in Economics, Finance Accounting, Finance and/or Investment Analysis. Additionally, if you wish to get a management position or a doctorate, a doctoral degree or master’s degree in Investment Analysis, Econometrics, Financial Engineering or Math along with the most prestigious private equity certification such as Chartered Private Equity Professional (CPEPTM) or Certified Public Accountant is an additional benefit.

The career path for private equity professionals

An associate who is a Pre-MBA is the smallest professional employed in PE companies. The next job opportunities include Associate Senior Associate, Associate Vice President, Director or Principal and Managing Director, or Partner.

Pre-MBA Associate

An Associate who is pre-MBA is expected to have between two and three years ‘ experience with the investment banks as well as accounting or consulting companies as Analyst.

Job description for Pre-MBA Associate

Screening and cold calling sectors for possible investors
Examine companies to identify potential investment opportunities
Deals with sources and transactions for support
Manage portfolio companies
Make a decision to raise capital, for investment purposes
Execute exit strategies
The ability to predict the ROI on investments

Career advancement

In two years’ time, you could be promoted to a senior associate after two years.
You could opt to pursue an MBA at a top university.
It is possible to change your career to hedge funds or entrepreneurial, corporate development, or other PE funds.

PE Associate salary

For a position as a PE Analyst you could earn USD 66,500, while the median pay for PE Associates is $90,863 annually according to PayScale.

MBA Post MBA Senior Associate

As we mentioned previously the senior private equity professionals have between three and six years experience in consulting, investment banking or private equity. They might be hired right out of business school too.

The job description of the Post-MBA Associate

responsible for screening deals and modeling
Assist advisors, such as lawyers, investment banks and accountants
Participate in the purchasing, underwriting, and closing and keeping track of PE investments
Find, structure negotiations, structure and oversee the investment transactions
Perform sophisticated operational and analytical tasks for current investments and proposed deals
Examine the financial and operating performance

Career advancement

Senior Associates may become Managing Director or partner in 6-8 years.

Senior PE Associate Salary

According to PayScale according to PayScale, the average wage for an Private Equity Senior Associate is USD 147,395 with an additional bonus of USD 60,000.

Vice President/Principal

It can take anywhere from three to six years to be a vice president. They or the Vice-President develop concepts in their areas of expertise, find investment opportunities, and oversee the implementation of transactions. They can also oversee portfolio companies.

The job description of the Vice President

Review and make the investment
Conduct the process of diligence, finance technology, memos, closings, as well as post investment management
Develop a competitive analysis, and explore new markets
Create and maintain internal models, systems and spreadsheets for tracking portfolio performance
Organise reports (internal and externe) (internal and external) LP report and summits for CEOs

Career advancement

They may be promoted to an associate if they have generated more revenue for the company.
Equity Vice-President Salary Private Equity Vice-President Salary

According to PayScale according to PayScale, the average wage for a full-time employee is USD 136091. In addition, they earn an amount of profit from investments (USD 8,757) and bonus (24,389) and commission (20,000).

Partner or Managing Director

The Managing Director is responsible for the direction of the company, managing relations with shareholders, increase funds, take part in the investment process and serves on the board of directors of the company.

The amount of compensation is contingent on the profits generated by the companies. Furthermore as a partner you should put a large portion of their personal wealth into the fund.

The jobs in this field are demanding and highly sought-after. Your skills bring value to your company.