How To Get an Investment Job In Private Equity: Step-by-Step Guide
Welcome to our guide to securing an investment job in Private Equity
This is, by some distance, the most common question we get asked. So, we decided to put this helpful and informative guide together to help get you started.
Here we provide an overview of the steps involved in becoming a private equity associate, from obtaining the necessary qualifications to pursuing the most promising job opportunities.
Let’s begin.
Sections/Chapters:
- Introduction to working in Private Equity
- Step 1: Education
- Step 2: Gain Work Experience
- Step 3: Network, network, network!
- Step 4: Pursue Job Opportunities
- Step X: You’ve just realised that you want to work in Private Equity and you missed out on some of the above, What now?
- Conclusion and next steps
Introduction to working in Private Equity
Private equity firms, also known as general partners (GPs), raise equity from investors, which are known as limited partners (LPs). These include big pension funds, or the offices of high net worth individuals. The GPs use the money they raise to acquire private (unlisted) companies.
They improve the way the company operates, along with the existing management team, in order to sell it on to another private equity firm or corporation, or to float it on the stock market.
Those fortunate enough to get work in private equity usually begin by becoming a private equity associate.
It’s an exciting and rewarding career path.
The job entails working with investors on a variety of financial projects, ranging from portfolio management and acquisitions to fundraising and restructuring.
To be successful in this field, you must have strong financial acumen, excellent communication skills, and the ability to think strategically.
However, according to our own senior private equity recruitment specialist, Richard Morgan, there is one specialism that outweighs them all:
“Whilst the advice for every individual differs, there is one skill that you absolutely must have and to a high level.
MODELLING. (Financial… not catwalk)
If you don’t have it, then you need to find a way to get it. It’s the reason M&A in an Investment Bank is such a popular hiring ground for PE firms.
Beyond that it’s just perseverance and hard work. It’s still a very competitive space, even if you have the modelling skills.”
Let’s take a look at each step in turn.
Step 1: Education
The first step to becoming a private equity associate is to earn a bachelor’s degree in a relevant field.
The most popular degree programs are Finance or Economics. Whilst there are a number of other suitable courses, if your degree is non-numerate then you’re going to struggle.
Given that exceptional academics are just par for the course in Private Equity, pursuing a Master’s degree is advisable. An MBA is generally something private equity professionals pursue later on. It would be more advisable to put your efforts into obtaining good internships at this early stage of your career.
Whilst the CFA isn’t necessary for most types of private equity investment, it is advisable if you are interested in the debt side.
Step 2: Gain Work Experience
Internships are viewed by most firms as an essential extension to your education. Securing good internships during or straight after your degree, will provide a huge boost to your chances.
Whilst graduate level roles do exist in the Private Equity industry, it is not the route taken by most. Only very large firms have the resources and personnel to provide the necessary training. Be mindful of this if a smaller firm is willing to hire you as a graduate.
For the above reasons, people typically pursue other types of roles to gain the necessary raw skills to secure a private equity associate role, which is the entry level for most firms.
Whilst private equity firms differ in the backgrounds they like to hire from, M&A in a respected Investment Bank is always a popular choice. Some firms will only hire from this area. Other options include Transaction Services or Corporate Finance with a consulting firm. However, these areas aren’t as appealing to most PE firms.
Whatever path you go down, make sure that you are getting high quality exposure and training on complex financial modelling. There is no substitute for this and if you don’t have it, you won’t get an investment role. A 6 week modelling course isn’t going to move the needle very much.
Unfortunately, recruiters can’t help much at this early stage. Large Private Equity firms and reputable banking and consulting programs are inundated with direct applications from graduates. This is the toughest and most competitive stage and it will quickly become clear why Steps 1 & 2 are so important.
Step 3: Network, network, network!
Networking can play a huge role in launching a successful career in private equity.
Attending conferences, seminars, and other industry events will help you make valuable connections and gain exposure to potential employers.
Additionally, building relationships with alumni from your college and current or former colleagues can be a great way to gain insight into the industry and take those first steps towards your career path.
Step 4: Pursue Job Opportunities
Once you have obtained the necessary qualifications and work experience, it’s time to start looking for a job in private equity.
You could start by researching potential employers and creating a list of targets. However, this is time consuming when trying to juggle it with a full time M&A role. This is the time to contact private equity recruiters who specialise in the industry.
For example, here at Carnegie Consulting we have developed a reputation for providing the very best talent to the UK market.
We have an eclectic client base from niche boutique specialists and smaller Family Offices, to diversified multi-fund investment firms. We are extremely well placed to put you forward if we think you have the potential to be a good fit.
Remember that private equity employers rarely post job openings online, so be sure to speak to experts like us.
Step X: You’ve just realised that you want to work in Private Equity and you missed out on some of the above, What now?
This is more common than you might think. It’s not unusual to need a little more time to figure out what you want to do in life. Unfortunately, the Private Equity space is so competitive that taking that little bit longer to decide can put you at a huge disadvantage.
The answer will be specific to your circumstances and a huge factor will be just how determined you are to work in Private Equity investment. Even if you’ve followed Steps 1&2 perfectly, it’s still far from easy. The more you have deviated from the above, the more difficult it will be.
Top academics are essential, so step 1 is non-negotiable. Assuming you have that, then it’s a case of what you’ve been doing since University and how relevant it is. If necessary, a Master’s degree or an MBA are good ways to draw a line in the sand and start again. Then it’s back to Step 2 and go from there.
One of the most common backgrounds that I have this discussion with are newly qualified ACA’s from practice. It generally comes as a bit of a shock, as it seems the ACA is sold as a broad qualification that lets you do whatever you want. Unfortunately, 3 years of audit whilst training to be an Accountant is 3 years swimming in the wrong direction. You will find plenty of ACA’s in the investment World. You won’t find many, if any, who moved there straight from audit.
Conclusion and next steps
Private Equity is a challenging but rewarding career path. To be successful in this field, you must have a strong academic background, as well as excellent communication and problem-solving skills. Unless you are able to secure a graduate level Analyst role, you must also have gained strong financial modelling skills in a relevant professional environment.
Follow the steps outlined in this guide and you could soon be well on the way towards a successful career in private equity.
We wish you the very best of luck.
And remember, when you are ready, don’t forget to get in touch!
