Private equity
Posted 7 days 12 hours ago by 300 Hours
Permanent
Full Time
Other
Not Specified, United Kingdom
Job Description
A career in private equity (PE) is one of the most interesting opportunities for those who already possess a passion for finance and who enjoy growing and building up a business in the long-term. Not only is this an extremely dynamic position, it can also be extremely rewarding both in terms of compensation as well as job satisfaction, which is perhaps why private equity is attractive to so many professionals.
So, what does a private equity specialist do? How can you progress through the ranks over time and what perks can you expect? In this article, we will take a deep dive into what you can expect from a private equity career path.
What does someone working in private equity do? Private equity (PE) is a type of alternative investments whereby PE firms aim to create value in businesses by investing directly in private companies, or buying out publicly listed companies to delist them from the public market.
PE firms tend to take a longer view in investment horizon, aiming to create value in private businesses through operational improvements, financing growth and other changes. Through financial leverage, active management and longer time horizons, these should drive returns for PE firms. Private equity firms (General Partner) also make money by charging management and performance fees to their investors (Limited Partners).
One of the main responsibilities of a private equity firm (General Partner, GP) is to raise capital. This is normally accomplished by working with third-party investors (Limited Partners, LP). With the capital that is raised, a private equity firm will then typically buy another company in order to improve its performance, restructure or add value before selling at a profit.
Private equity firms therefore work to identify potentially lucrative opportunities, secure investments and manage companies to meet objectives. Once investment in a project is obtained, the private equity firm will retain a small percentage of the funds. The remainder is then devoted towards the venture in question (such as restructuring a company or asset before reselling it to enjoy an appreciable return-on-investment).
So, what daily tasks will a private equity specialist perform? One primary duty involves analyzing investment opportunities in order to decide if they should be recommended to a Limited Partner. This means that a significant portion of the day may be spent on tasks such as reviewing balance sheets, collating historical data, carrying out market research and valuation.
Communication and collaboration are also important parts of the job; particularly for those who have risen past entry-level positions. Additional responsibilities may include managing investments, post-investment monitoring, working with other team members, and presenting new opportunities to external investors.
There can often be multiple projects underway at any point, so it's important that successful individuals in the industry are able to switch focus when needed. It's also important to have the ability to assess each venture from various perspectives so that objective decisions can be made. This means being able to see things from the point of view of their firm and their investors, as well as the company they're looking to invest in including its staff and customers.
Private equity is often involved in long-term ventures as opposed to one-off investment opportunities. This is why establishing transparent relationships with investors and other stakeholders is another important part of a career in private equity.
Why work in private equity? Private equity is a popular sector, and a common target exit option for investment bankers. One important driving factor involves highly competitive compensation packages, typically with relatively better work life balance than investment banking. That said, working 80 hours a week is not unusual during busy seasons or if you're in the top PE firms.
The private equity sector has seen significant growth in recent years which has led to a strong employment outlook, as firms are always seeking to hire qualified and talented professionals. There several other reasons why private equity is considered to represent an attractive opportunity including:
Private equity career progression and hierarchy The fluid nature of this role means that the exact career path and opportunities for progression will usually vary between firms (and depending upon the requirements of each). However, there are a number of typical milestones in the industry. Let's examine each stage and what responsibilities will be expected.
Analyst PE analyst typically have 2-4 working experience, recruited from other firms like investment banks, accounting, consulting firms etc, depending on specialization.
Entry-level employees tend to perform a fair amount of "grunt" work such as crunching numbers, generating potential leads and data entry. At this stage, the majority of junior analysts will focus upon specific portions of a deal as opposed to directly overseeing the entire process.
Associate Private equity associates are slightly higher up in the food chain. Associates are often tasked with reviewing the work of junior analysts in order to check for potential errors. They will also communicate with other in-house teams (such as legal and accounting) in order to determine the viability of a specific venture. Assuming that the investment is tentatively approved, associates may become involved with more complex modelling responsibilities. Once again, the exact duties will depend upon the size and speciality of the firm. Most associates are generally younger than 30 years of age, and they will typically remain in this position for an additional two to three years before looking to move up.
Senior Associate Senior associates enjoy a more well-rounded role within the firm. They are responsible for various tasks such as developing new investment opportunities, communicating with third-party partners, performing financial valuations, and attending board meetings. Senior associates will also work closely with partners and in many cases, they are rewarded with substantial commissions (assuming that a deal is approved). Once again, many individuals will remain at this position for between two and three years. Some may choose to remain within the firm while others could instead consider potential exit opportunities.
Vice President Vice presidents are generally concerned with how the deals themselves are managed. They are the public face of the private equity firm. A private equity VP will develop working relationships with limited partners, and they may also travel frequently in order to secure new investments and meet with clients. Vice presidents will also often act as mentors to associates and senior associates. Up to four years of experience may be required before a vice president is able to ascend yet further. Note that many firms will have more than one active vice president at any given time.
Assuming that a deal is identified and approved, private equity directors will often be directly involved with any subsequent client negotiations. This is one of the most powerful positions, as directors will often have an influence upon the investment strategy of the firm. Individuals at this level will typically be heavily involved with the management of larger portfolios as well as ensuring a higher return-on-investment. As a senior role within the firm, some directors may remain at this position for the rest of their careers. However, others may wish to move on, with around four years the typical length of time needed before progressing to start up their own company.
Partner Or Managing Director (MD) In the majority of cases, this is the most senior position that can be obtained at a private equity firm. Many managing partners and directors are also founders of the company itself. They are involved with nearly every operational aspect of the firm and while managing directors may not oversee entry-level employees, they will still be ultimately held accountable in the event that a mistake was made in the pipeline. However, this level of administrative oversight is also rewarded with extremely generous salaries and compensation packages. Decades of experience are normally required, and most managing partners will remain at this position for the remainder of their career.
Salaries in private equity The salaries associated with the positions outlined above will vary between organizations and yet, we can still draw some general conclusions based on recent industry statistics. As with many careers in the financial sector, those working in private equity will typically receive a base salary and a performance related bonus on top. Another type of compensation that some private equity professionals receive is known as carried interest. This is a type of bonus that is paid once the company invested in is sold or floated, which is usually a few years after the initial deal was made. Carry can be significant for top performers.
Some average salary ranges for private equity roles in the US and the UK are shown below.
. click apply for full job details
So, what does a private equity specialist do? How can you progress through the ranks over time and what perks can you expect? In this article, we will take a deep dive into what you can expect from a private equity career path.
What does someone working in private equity do? Private equity (PE) is a type of alternative investments whereby PE firms aim to create value in businesses by investing directly in private companies, or buying out publicly listed companies to delist them from the public market.
PE firms tend to take a longer view in investment horizon, aiming to create value in private businesses through operational improvements, financing growth and other changes. Through financial leverage, active management and longer time horizons, these should drive returns for PE firms. Private equity firms (General Partner) also make money by charging management and performance fees to their investors (Limited Partners).
One of the main responsibilities of a private equity firm (General Partner, GP) is to raise capital. This is normally accomplished by working with third-party investors (Limited Partners, LP). With the capital that is raised, a private equity firm will then typically buy another company in order to improve its performance, restructure or add value before selling at a profit.
Private equity firms therefore work to identify potentially lucrative opportunities, secure investments and manage companies to meet objectives. Once investment in a project is obtained, the private equity firm will retain a small percentage of the funds. The remainder is then devoted towards the venture in question (such as restructuring a company or asset before reselling it to enjoy an appreciable return-on-investment).
So, what daily tasks will a private equity specialist perform? One primary duty involves analyzing investment opportunities in order to decide if they should be recommended to a Limited Partner. This means that a significant portion of the day may be spent on tasks such as reviewing balance sheets, collating historical data, carrying out market research and valuation.
Communication and collaboration are also important parts of the job; particularly for those who have risen past entry-level positions. Additional responsibilities may include managing investments, post-investment monitoring, working with other team members, and presenting new opportunities to external investors.
There can often be multiple projects underway at any point, so it's important that successful individuals in the industry are able to switch focus when needed. It's also important to have the ability to assess each venture from various perspectives so that objective decisions can be made. This means being able to see things from the point of view of their firm and their investors, as well as the company they're looking to invest in including its staff and customers.
Private equity is often involved in long-term ventures as opposed to one-off investment opportunities. This is why establishing transparent relationships with investors and other stakeholders is another important part of a career in private equity.
Why work in private equity? Private equity is a popular sector, and a common target exit option for investment bankers. One important driving factor involves highly competitive compensation packages, typically with relatively better work life balance than investment banking. That said, working 80 hours a week is not unusual during busy seasons or if you're in the top PE firms.
The private equity sector has seen significant growth in recent years which has led to a strong employment outlook, as firms are always seeking to hire qualified and talented professionals. There several other reasons why private equity is considered to represent an attractive opportunity including:
- The ability to transform the financial outlook of an entire company.
Private equity career progression and hierarchy The fluid nature of this role means that the exact career path and opportunities for progression will usually vary between firms (and depending upon the requirements of each). However, there are a number of typical milestones in the industry. Let's examine each stage and what responsibilities will be expected.
Analyst PE analyst typically have 2-4 working experience, recruited from other firms like investment banks, accounting, consulting firms etc, depending on specialization.
Entry-level employees tend to perform a fair amount of "grunt" work such as crunching numbers, generating potential leads and data entry. At this stage, the majority of junior analysts will focus upon specific portions of a deal as opposed to directly overseeing the entire process.
Associate Private equity associates are slightly higher up in the food chain. Associates are often tasked with reviewing the work of junior analysts in order to check for potential errors. They will also communicate with other in-house teams (such as legal and accounting) in order to determine the viability of a specific venture. Assuming that the investment is tentatively approved, associates may become involved with more complex modelling responsibilities. Once again, the exact duties will depend upon the size and speciality of the firm. Most associates are generally younger than 30 years of age, and they will typically remain in this position for an additional two to three years before looking to move up.
Senior Associate Senior associates enjoy a more well-rounded role within the firm. They are responsible for various tasks such as developing new investment opportunities, communicating with third-party partners, performing financial valuations, and attending board meetings. Senior associates will also work closely with partners and in many cases, they are rewarded with substantial commissions (assuming that a deal is approved). Once again, many individuals will remain at this position for between two and three years. Some may choose to remain within the firm while others could instead consider potential exit opportunities.
Vice President Vice presidents are generally concerned with how the deals themselves are managed. They are the public face of the private equity firm. A private equity VP will develop working relationships with limited partners, and they may also travel frequently in order to secure new investments and meet with clients. Vice presidents will also often act as mentors to associates and senior associates. Up to four years of experience may be required before a vice president is able to ascend yet further. Note that many firms will have more than one active vice president at any given time.
Assuming that a deal is identified and approved, private equity directors will often be directly involved with any subsequent client negotiations. This is one of the most powerful positions, as directors will often have an influence upon the investment strategy of the firm. Individuals at this level will typically be heavily involved with the management of larger portfolios as well as ensuring a higher return-on-investment. As a senior role within the firm, some directors may remain at this position for the rest of their careers. However, others may wish to move on, with around four years the typical length of time needed before progressing to start up their own company.
Partner Or Managing Director (MD) In the majority of cases, this is the most senior position that can be obtained at a private equity firm. Many managing partners and directors are also founders of the company itself. They are involved with nearly every operational aspect of the firm and while managing directors may not oversee entry-level employees, they will still be ultimately held accountable in the event that a mistake was made in the pipeline. However, this level of administrative oversight is also rewarded with extremely generous salaries and compensation packages. Decades of experience are normally required, and most managing partners will remain at this position for the remainder of their career.
Salaries in private equity The salaries associated with the positions outlined above will vary between organizations and yet, we can still draw some general conclusions based on recent industry statistics. As with many careers in the financial sector, those working in private equity will typically receive a base salary and a performance related bonus on top. Another type of compensation that some private equity professionals receive is known as carried interest. This is a type of bonus that is paid once the company invested in is sold or floated, which is usually a few years after the initial deal was made. Carry can be significant for top performers.
Some average salary ranges for private equity roles in the US and the UK are shown below.
. click apply for full job details