Private Equity Job Descriptions – The Ultimate Guide

Embarking upon a career in private equity can be a very financially rewarding endeavor. In the field of private equity, you will put your financial and networking skills to work in order to collaborate with big investors and turn companies and organizations around for profit. While positions in private equity require a lot of your time and hard work, they are also exciting, interesting, and rewarding.

Private Equity Key Responsibilities

While there are different roles within a private equity firm, many of the key responsibilities are consistent. Here are major skills and functions that you will employ in a private equity position.

Networking and Developing Relationships

The primary role of a private equity firm is to secure financing from investors in order to purchase an organization and then sell that organization for a profit. Therefore, a large part of a position in this field requires partnerships and collaboration with a variety of different groups or individuals. 

 In addition to seeking and communicating with investors and buyers, you need to be able to entice them to work with you. It is important to learn as much as you can about their personal or company goals, finances, and what will encourage them to want to close the deal. These elements will vary for each investor and buyer, so it requires a great deal of attention and diligence in order to understand each individual or group enough to partner or complete a sale.

Financial Knowledge 

One of the best ways to attract investors or buyers is by having a very strong understanding of mathematics, accounting, and economics. A job in private equity requires assessing the financial aspects of a potential purchase in order to attract investors, including its worth and projected profitability. Additionally, this knowledge will be important in securing a buyer, as these clients will expect verification that they are purchasing an organization that will be lucrative for them.

Along with these financial basics, it is crucial to understand financial laws and regulations. Part of securing deals will involve creating contracts and understanding which investors hold liability and how much they earn in the eventual sale of the organization. Understanding how to navigate these rules in the process of making deals with both investors and buyers is essential to protecting your firm and all parties involved.

Employing Soft Skills and Critical Thinking

An underlying expectation of any role that you take on in a private equity firm will be communication and interpersonal skills. In addition to collaborating amicably with your colleagues, this field requires you to liaise frequently with a variety of different individuals and groups. Effective communication, constant motivation, and flexibility are essential skills when surrounded by high-powered and high-achieving individuals.

 Critical thinking skills are also essential for jobs in the private equity field. You will need to think outside of the box often in order to figure out how to bring together investors or solicit a buyer. Additionally, the job requires a significant amount of financial analysis in order to make informed proposals and to complete deals that benefit your firm while satisfying all parties involved.

Private Equity Job Location

Those holding positions in private equity largely work in firms. These companies can be located nearly anywhere, though they are more prevalent in large cities where finances and populations tend to be higher. While there are private equity firms worldwide, especially in the United Kingdom and Asia, they are most commonly located in the United States.

 Private equity firms can be large or small, boutique organizations. The firms may focus on a specific type of investment, such as technology, while others invest in a variety of different companies. Although many firms are located in the United States, they may garner investments or sell to buyers all over the globe.

Private Equity Experience and Education

In order to secure a position in a private equity firm, you need to have a foundational knowledge of mathematics, particularly in accounting, statistics, and economics. Additionally, work experience is vitally important, as private equity firms work with wealthy and powerful clients and require competent and knowledgeable employees.

Education Requirements

A Bachelor’s degree is the minimum requirement for entering the field of private equity. The undergraduate major should be in mathematics or a related area. Additionally, many employers look at the particular college that prospective employees have attended, as well as their GPA and other accomplishments to set them apart from their peers. 

Some who work in private equity may elect to pursue an MBA. It is recommended to gain experience for a few years as an analyst and associate prior to pursuing the MBA, as it can be difficult to get into the field of private equity without significant relevant experience in this specific sector first.

Experience Requirements

Work experience within investment banking is essential for securing a job in private equity. It is recommended to pursue an internship during or immediately after completing your undergraduate degree. You can also begin as an analyst at an investment banking or private equity firm following graduation in order to start gaining experience and building your resume.

Private Equity Salary

According to the US Bureau of Labor Statistics [https://www.bls.gov/oes/current/oes132098.htm], financial specialists in investments report a median salary of about $95,000. The range in salary extends from the many analysts beginning in the field to the fewer number of partners and managing directors earning significantly more due to their experience and time invested.

Although private equity firms can be found around the country, several states offer increased job opportunities and salaries. California, Texas, and New York, respectively, employ the most investment specialists, and New York offers the highest median compensation. All of these states offer salaries at or above the national median.

Private Equity Resume Tips

As you compile your resume, it is important to cultivate your education, skills, and experiences to the expectations of the field and the specific position. Private equity is a competitive field, and in order to secure an interview with an employer or a conversation with a headhunter, your resume needs to capture their attention.

The primary focus for each of your work experiences should be deals that you have helped to broker. The largest part of your job will be securing investors and buyers and proving that you have done so successfully in the past will be crucial to your prospects as a potential employee.

Additionally, be sure to specify the skills that you possess and have employed in other positions. Firms will be looking for employees who will be a good fit for the culture of their organization, and proof that you can communicate, are flexible, and have good critical thinking skills will help to get you to the next step in the process.