Every investment banking professional looks forward to getting into a private equity firm.
Since these firms are smaller than investment banks, job opportunities may be lesser and the competition fierce.
Becoming a private equity professional in the finance sector is arguably one of the most sought-after job roles that many professionals thrive.
A private equity career has a lot to offer to candidates who are ambitious and possess analytical skills.
If you’re looking to join the cutting-edge of the finance world, you may surely prefer a career in private equity.
What is private equity?
Private equity consists of investors and funds that put in millions of dollars for the acquisition of stakes in companies that requires capital or restructuring. Companies that are already generating revenues and that can be made more profitable.
They can sell the company or buy it if they wish to keep it for a longer period.
An investment in private equity comprises private companies that often turn around their business models or management, and then sell them to gain profit out of it. Precisely, most companies start at being private. However, a public company has the advantage of selling out public shares and then go private if the benefits earned over here are greater.
The core difference between private equity and public equity is that private equity investors are generally paid via distribution rather than the stock accumulation.
Private equity firms mostly invest in mature companies that have already been established. These companies may be going down in the market or probably not making any kind of profits. Such firms are good targets for private equity. These companies are then getting their operations streamlined which helps in increasing revenues.
How do you initially start here?
An entry-level job role for a private equity professional is that of an analyst.
Being an analyst in the job role, your core responsibilities will include –
- Preparing relevant documentation for partners
- Research for new deals and in investment areas
- Coordinating the research and the need for the deal to take place
As time goes by, you may even be allowed to work on projects of a particular area or an industry and become an expert in that field.
Is it tough getting into private equity?
Most of the private equity firms do not believe in recruiting straight out of the university. However, graduates with an MBA degree from business schools or those with years of experience in the investment banking field may have a fairer chance of easily getting in private equity jobs.
These firms prefer having headhunters find them the best recruit from investment banks.
The best procedure to get into a private equity firm is to first apply for a job in an investment bank and gain the skills and experience as an analyst. An added advantage, if you work through your networking you may even end up on a headhunters list.
Another route to get into private equity is by earning professional certification. There are very few best private equity certification bodies through which you may avail of these skills.
Such names include United States Private Equity Council (USPEC), Corporate Finance Institute, and CFA Institute, etc.
If you’re looking to get into a profession where your money gets multiplied, then choosing a career in private equity is your best bet.