Working at a Private Equity Firm

Private equity firms invest in businesses that are not listed publicly, and then work to grow or transform them. Private equity firms usually raise funds in the form of an investment fund with a defined structure and distribution funnel, and then they invest that money into the companies they want to invest in. Fund investors are known as Limited Partners, and the private equity firm serves as the General Partner in charge of buying and selling the targets to maximize profits on the fund.

PE firms are often critiqued for being uncompromising in their pursuit of profits They often have a vast management experience that allows them increase the value of portfolio companies through operations and other support functions. They could, for example guide a newly appointed executive team by providing the best practices for financial and corporate strategy and assist in the implementation of streamlined accounting, IT and procurement systems to reduce costs. They cybersecurity measures to protect your business also can identify ways to improve efficiency and increase revenues, which is one way they can improve the value of their assets.

Unlike stock investments that can be converted quickly into cash however, private equity funds typically require a large sum of money and may take a long time before they can sell a company they want to purchase at an income. This is why the sector is in liquid.

Working for a private equity firm typically requires prior experience in finance or banking. Associate entry-levels are primarily responsible for due diligence and finance, whereas junior and senior associates are accountable for the interaction between the clients of the firm and the firm. In recent years, compensation for these roles has risen.