Finance

Working in A Private Equity Firm: An Overview

Private equity (PE) firms invest in a range of industries across the globe. It plays a vital role in enabling companies to realize their growth potential. PE firms help their portfolio companies to grow businesses, launch initiatives, upgrade technologies, systems, and support to implement a long-term strategy. PE firms provide strategic guidance for operational improvement, revenue growth, leadership development, lean process, optimize IT operation, employee healthcare, and more.

According to a report from EY and the Kenan Institute of Private Enterprise, Private Equity firms manage US$ 3.4 trillion of investor commitments at the global level. It was less than US$ 500 billion in 2000. More capital flows into private equity and the companies backed by PE firms employ almost nine million people in the US. Blackstone, the global leader in private equity has US$174 billion in assets under management.

A few of the leading private equity firms in the world include

  • Goldman Sachs Capital Partners
  • Kohlberg Kravis Roberts
  • Bain Capital
  • Blackstone Group

Working in a private firm is interesting and challenging. The boom in private equity inspires every finance graduate to land their career in private equity. Most of the youngsters, either MBA graduates or finance graduates may not know what it takes to avail of a private equity job, but get drawn to these jobs for money and glamor. Let us understand the on-roll responsibilities of the professional here.

Roles and Responsibilities of private equity professionals

A few of the major responsibilities for a private equity professional are enlisted as follows.

  • Monitor investments of the existing ones
  • Finalize the funds’ review (both quarterly and yearly) and portfolio companies
  • Create and update financial models of portfolio companies
  • Review and study about possible potential investments
  • Preparation of information memorandums
  • Interact with senior PE professionals and acquire knowledge on existing and potential investments
  • Research on target investments in a detailed manner
  • Conduct review on documentation and deals
  • Research on industry and look for possible future investment areas
  • Complete additional duties, build portfolio analysis and performance metrics
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To continue, let us know the required education, skills and requirements to avail PE jobs.

Required Education and skills for acquiring a PE Job

Most of the private equity firms prefer candidates having a strong academic background with at least one or two years of relevant experience. It could be gaining internships in PE and related firms or working experience in investment banking.

MBA graduates from reputed business schools are preferred in private equity firms. In addition to academic qualifications, communication skills are a must as PE job is a client-facing job.

You may start your career as an analyst or Associate depending on your educational background and experience.

Above all this, timing and sales skill form the baseline qualification, says Bjorn Marten son. He says when a private equity professional has a background in sales, it helps to understand the market. An in-depth market scenario prepares the professional to make the investment successful.

In addition to academic skills, people skills, analytical skills, research, and product knowledge is crucial to thriving in the industry.  

At the bottom line, this is the world of private equity. The quest for a career in private equity and having the right basics will help you thrive in the industry.

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