The Ultimate Guide to Become a Private Equity Professional

Several professionals are drawn towards private equity careers for many reasons such as better compensation, better hours for working, interesting work, and growth. This is the best place for those who possess a keen interest in operations, and investing and are looking to develop value for the organizations in the long run.  

The job of a private equity professional is mainly, to acquire capital from outside investors, like Limited Partners (LP), and with the help of raised capital to purchase other organizations, improve them, and then sell them to get the returns on their investment.  

In this article, let’s dive deeper and understand how to get into private equity. 

How to get into Private Equity (PE)? 

Finding a job in the private equity industry can be a competitive process, and success usually needs a strategic and proactive way to achieve it. Several PE firms look for professionals with a combination of relevant education, skills, experience, and a strong understanding of the industry.  

• Educational Prerequisites to get a job in PE firm

This industry is called “private” equity because the organizations in which the private equity enterprises invest, are mainly private or they become private because of the investment.  

If an individual is looking for a job in a PE firm, they must obtain a relevant degree in finance, business, economics, or a related field. Many private equity professionals hold advanced degrees, like MBAs or master’s in finance. Top academic credentials such as grades, test scores, and sometimes university reputation. 

• Essential Skills 

It is essential to master skills for a rewarding career in a PE firm. There are many professionals who with their skills have reached great heights in their careers. The PE firms look for individuals who possess the following skills: 

• Individuals who are highly attentive to crucial details 
• Candidates who mainly focus on achieving more and are willing to work long 

• Interested in cracking new deals and showing enthusiasm for generating more deals 
• Who are not afraid of taking risks rather than just investing in public organizations 
• Shows keen interest in investing and operations 
• Willing to be a part of long-term projects that include developing a portfolio organization across many years 
• Use critical thinking to evaluate the organizations rather than just being an agent or just selling 
• Interested in non-deal work such as fundraising and monitoring the organizations 
• Should possess the ability to think critically about investments and organizations 
• Soft skills like communication, negotiation, and problem-solving to be the best fit for a private equity job 
• Must be aware of the latest market and overall economic trends 

• Relevant Experience

Private equity firms do not usually hire on college campuses. Even the most reputed business schools like Harvard, Yale, and the Wharton School go for campus job fairs. These firms usually don’t show much interest in hiring inexperienced business school graduates, no matter how bright one is. Several professionals begin their private equity careers in investment banking. Many of them shift to PE by gaining experience in M&A, financial analysis, and deal structuring. One must focus on transaction experience, as PE firms value individuals with a track record of deal execution. 

• Preparing for Interviews

To be among the best and to get hired as a private equity professional be prepared for technical interviews that may include financial modeling exercises, case studies, and questions about the deal experience. Understand the latest updates by reading some case studies, news, innovations and more about the PE firms research thoroughly before you attend the interviews, know their portfolio, investment approach, and recent transactions. 

|Read More: Private Equity Interview

• Consider an internship

If an individual is finding ways on how to get into private equity then internships are the best to consider. During the undergraduate and business school summers, applying for internships that closely relate to private equity. If one cannot find an internship at a PE firm, then one can choose venture capital, investment banking, or asset management. The objective is to show recruiters that they are driven with passion to be a part of the PE industry. 

Wrapping Up 

Getting a job in PE usually needs a strong educational background in finance or a related field, relevant experience in areas such as investment banking, and proficiency in financial modeling and investment analysis. Networking and effective preparation for rigorous interviews, like case studies, is very essential. Aspiring individuals must consider focusing on the culture of the PE firm they want to join and begin preparation before their first interview.