Most of the people these days are drawn toward private equity firms because of interesting work, and high compensation. These companies non-publicly trade capital, which is not listed on a public exchange. In other words, it is referred to as funds used to buy public organizations that are not able to sustain themselves in the stock market.
How has PE industry grown?
Over the last decade, this industry has increased its socially acceptable activities. There are three primary reasons for this perception change that took place related to this industry:
- Cautious investments in socially responsible organizations only
- Prioritizing economy at large during investment execution with stakeholders
- Helping companies sustain as well as raise their employment levels
These firms widely invest in venture capital, growth equity, mezzanine financing, leveraged buyouts, and distressed buyouts depending on the organization’s industry, investment strategy, and size. Students and working employees often get confused about a private equity career path. There are various private equity certifications available from various institutions which is a predicament for students regarding the right choice to seek a PE career. Here is a detailed guide assisting individuals looking for private equity careers to understand the scope, skills, and education qualifications required to become analysts or associates or even principals and vice presidents.
What is a private equity job like?
Private equity professionals work closely with client prospects or firms to conduct due diligence. These professionals typically raise capital from external investors or organizations. The work structure in the private equity sector is explained hierarchically. However, this order varies from company to company.
PE Analyst:
A private equity analyst is an individual who primarily evaluates ratios, conducts researches, and provides interpretations on private organizations using finance modeling techniques, valuation methods, and due diligence.
PE Associate:
PE associates closely work with prospects or client organizations to conduct due diligence. To do so he/she must be proficient in visualization, modeling, and data analysis.
PE Vice President, Director, or Principal:
These job positions assist managing directors and supervise associates in negotiating deals with target organizations, and crafting investment strategies.
PE Managing Director or Partner:
These are positioned with a responsibility to make ultimate decisions on the funds to be invested in organizations and the structure of the investment deals done.
Whom does private equity job best suit?
This private equity career would stimulate any individual who is:
- Highly attentive to detail
- An individual with strong quantitative, financial, and analytical modeling skills
- An enthusiastic individual having a strong understanding of market research and technologies.
- Interested in operations and investments using critical thinking to assess organizations
- Achiever or a competitor who is willing to work for long hours
What are the qualifications required to work in private equity?
The skills needed to land a private equity job are:
- Get a master’s degree in finance from a top-notch institute such as Harvard, Stanford, Cambridge, and so on or a Chartered Financial Analyst qualification with four years of relevant experience in the field clearing all three levels.
- With the above educational qualifications, you can go for private equity certifications like Associate Chartered Accountant (ACA), Chartered Private Equity Professional (CPEPTM) program, and Chartered Alternative Investment Analyst (CAIA).
Usually, these firms hire analysts from boutique banks, middle-market banks, and bulge-bracket investment banks. Undergraduates or even PE professionals from competitors’ organizations are hired in rare cases. To work in private equity it is always recommended to be a certified private equity professional to stand unique from other job seekers and grab an opportunity.
