Private equity (PE) firms seek 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 and high-net-worth individuals. Private equity professionals earn profits for their firms by facilitating the business’s operations. In short, the experts are responsible for fundraising, operational management and investment.
Let’s look at the path to career that is followed by PE specialists here.
Beginning a career in private equity
The candidate must be a graduate in Economics, Finance Accounting, Finance as well as Investment Analysis. If you are looking to get a management position having a doctorate degree on Investment Analysis, Econometrics, Financial Engineering or Math along with the top private equity accreditation such as Chartered Private Equity Professional (CPEPTM) or Certified Public Accountant is an added benefit.
The career path for private equity professionals
An associate who is a Pre-MBA is the smallest professional within PE companies. The next positions in the career ladder are Associate Senior Associate Vice President, Director or Principal and Managing Director, or Partner.
An Associate who is pre-MBA should have two to 3 years experience working in the investment banks, accounting firms or consulting companies as Analyst.
Job description of the Pre-MBA Associate
Screening and cold calling areas for investors
Review companies to find potential investment opportunities
Support transactions and source deals
Manage portfolio companies
Make a decision to raise capital, for investment purposes
Execute exit strategies
The ability to predict the ROI on investments
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 as well as entrepreneurial, corporate development, or other PE funds.
PE Associate salary
For a position as a PE Analyst you can earn up to USD 66,500, while the median pay for PE Associates is 90,863 USD per year according to PayScale.
Visit the fe.training website for information on a private equity certification.
MBA Post MBA Senior Associate
As previously mentioned Senior private equity professionals with 3 to 6 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 model
Assist advisors, such as lawyers, investment banks and accountants
Participate in the finding, underwriting, closing and keeping track of PE investments
Find, structure and structure, negotiate, close and oversee investments transactions
Perform sophisticated operational and analytical tasks for investments in the present and future deals
Review the operating and financial performance
Senior Associates may become Managing Director or partner in 6-8 years.
Senior PE Associate Salary
According to PayScale the median salary for an Private Equity Senior Associate is USD 147,395 and includes an additional bonus of USD 60,000.
It could take between three and six years to be a vice president. They or the Vice-President develop ideas within their area of expertise, find investments, and manage the execution of deals. They can also oversee portfolio companies.
The job description of the Vice President
Review and make the investment
Control the process of diligence, finance technology, memos closings, as well as post investment management
Develop a competitive analysis, and explore new markets
Maintain and build internal models, systems and Portfolio performance tracking worksheets
Organise reports (internal as well as external) – – quarterly LP Reports and CEO Summits
They could 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 of employees is USD 136091. In addition, they earn an amount of profit from investments (USD 8,757) as well as a bonus (24,389) as well as commission (20,000).
Partner or Managing Director
The Managing Director is responsible for leading 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 that the company makes. Additionally as a partner one must invest a substantial amount of his personal wealth in the fund.
The jobs in this field are extremely challenging and sought-after. The skills you have can add value to the company.