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Getting into Private Equity: Amazing Hacks

Meta Description: Private Equity jobs are less in number, demanding, and challenging for recent graduates. Having prior experience in finance is crucial to enter the sector.

Private equity (PE) firms invest money in companies that are undervalued, acquire them, hold them for a certain period (not more than ten years), improve operations, create value, and sell them. The main responsibilities in a private equity firm involve venture capital, growth capital, distressed investments, and leveraged buyouts. The PE firms’ ranking depends on the capability to raise capital.

A career in private equity (PE) attracts every novice financial graduate and others who are working in finance sector companies. The main reason is that private equity firms pay a hefty amount of salary, incentives, and bonuses. There is every chance to make money even in the first year of your career. Mention not to say, it is challenging to break into the private equity career.

The general tasks at a private equity firm include:

  • Identify new deals for LBO
  • Analyze of a target business for a leveraged buyout
  • Collect data from the target company
  • Research for a transaction
  • Efficient communication

Private Equity jobs are less in number as compared to jobs in investment banking or stockbroking. Securing a job in private equity needs due diligence and creativity. Generally, the companies hire candidates straight out of college, professionals who have worked at an investment bank for two years, and candidates who have secured MBA programs. In PE, the execution of one investment a year is a lot and it requires a lot of patience.

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Getting into Private Equity

Vik Sawhney, Senior MD at the Blackstone Group says that young bankers who want to enter the industry must have a sincere passion for the work, grit, humility, and a lack of entitlement.

As mentioned earlier, private equity jobs are challenging. Most of the private equity firms do not handle in-house human resource. They retain third-party recruiting firms to handle their hiring process. It includes almost everything from the screening of resumes, conducting initial interviews, background screening, drug testing, and other formal requirements.

You may get a chance to meet the firm executives at some point during the interview. Remember, it is one shot for you to create an impression. The recruiting firms will have a plentiful number of resumes already and may never see you on LinkedIn profiles or job sites. It is necessary to initiate contact and have repeated follow-ups.

Private equity firms demand experience for every job opening. Therefore, internships are important. It is critical to apply for every internship during school summers. You can try internships at private equity, venture capital, asset management, or investment banking. In brief, professionals at private equity are financially literate.

Another caution is to have a job right away. Because the firms conduct interviews a full year in advance. The interview includes multi-steps and the process takes a year to complete. Another thing to remember is that several companies grow talent in-house. They look for candidates having financial-modeling skills, basic knowledge of corporate finance and build candidates from there.

If you cannot get a job after internships, it is better to opt for a job in investment banking for two to three years and then switch over to private equity jobs.

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