How to Get a Job in Private Equity

Written by
Rebecca Smith

Jul 15, 2021

Jul 15, 2021 • by Rebecca Smith

It’s no secret that trying to find sustainable employment after graduation is fraught with its own unique challenges. In today’s unstable economy, securing the means to provide for yourself -- as well as your family -- can seem like an almost herculean task. This is especially true for those of you who may have looming student debt that you’re trying to pay off, as the compounding interest can further exacerbate your stress when looking for work. While many industries claim to be actively hiring, it’s safe to admit that some job prospects are vastly superior to others. Because of this, the private equities sector has repeatedly proven to be a notable prospect for many jobseekers.

Unlike other industries (which may offer only paltry wages and grueling hours), private equity firms have managed to stand apart from other skilled labor careers. Not only can they provide you with a reliable means of earning an income, but they also boast flexible hours and even all-but-guaranteed job security. This translates to a fantastic opportunity for those who seek private equity jobs, delivering a markedly improved quality of life to new hires. Whether you’re looking to transfer from your current industry to start one private equity, or you are hoping to break into a career with private equity firms, the prospects for private equity jobs are surprisingly attractive.

What is a Private Equity Firm?

Before delving into the process of securing private equity jobs, it’s important to first recognize exactly what is a private equity firm to better understand exactly how do private equity companies work. A private equity firm definition is, in brief, a team of institutional investors who purchase shares in a business to gain a handsome return on investment (ROI). From aerospace and defense private equity firms, to those that invest in internet startups, the process is largely similar across the board.

Rather than actually managing a company, however, how a private equity firm works is by instead acting as a source of investment capital for them. Oftentimes, they may take greater than a 50% stake in the company’s shares, securing a majority position in the business. It’s important to note that these private equity firms don’t generally touch publicly traded companies, though. Instead, they either focus exclusively on private businesses, or they actively delist publicly traded companies in order to privatize them.

How to Get a Job in Private Equity?

Finding gainful employment at private equity firms is a multistep process, and many people soon discover that it can be quite difficult to actually get hired by one. As they are so exclusive, and the private equity job requirements are so nuanced, employers at these private equity jobs don’t actually oversee the hiring process themselves. Instead, they tend to send out recruiters to scout out new potential employees. With that in mind, if you hope to ever have a chance at being hired by one of the best private equity firms in the country, then you must first introduce yourself to their headhunters.

Of course, it’s not enough to merely extend your hand for a shake and expect to suddenly land a job with a prestigious private equity firm. You also need to have the necessary experience to fit in with their workplace, too. Learning what do private equity firms do can give you a strong advantage over other candidates, lending you a much-needed competitive edge. Internships are a fantastic way to accomplish this, as these private equity firms almost never hire directly out of business school. 

And finally, it’s essential to have a good head on your shoulders and not be easily discouraged, as the entire process of securing private equity jobs can be fairly daunting. Between your initial meeting with the private equity firm’s recruiter to your first day on the job, several steps must first be completed. The interview process is notoriously grueling, and the time between the first interview to the actual job offer can take more than six months of meticulous screening in total. 

Why Working in Private Equity is a Great Career

The old adage of good things coming to those who wait has merit, though, especially when it pertains to seeking employment with private equity firms. While it may initially feel as though you’re jumping through a number of hoops to even land on their radar, the payoff is more than worth it once you finally secure a coveted position at a private equity firm. Many industry reports suggest that job satisfaction in private equity firms is remarkably high, no doubt due to the fact that the hours are good, the pay is great, and the work itself is incredibly rewarding. 

With that said, private equity jobs aren’t for everyone, and not everyone will enjoy working in this industry. Specific qualifications, as well as particular personality types, tend to do better than others. If you’re the type of person who is both adaptable and level-headed, you can think on your feet, you have a keen eye for detail, and you love seeing the company you’re working with grow and succeed, then a career in private equity just might be a perfect fit for you.

What Roles do Private Equity Firms Hire For?

If you are looking for a long-term career at private equity firms, then it’s important to remember that there is a hierarchy at most firms. To succeed at any of these private equity firms, you will have to climb the corporate ladder, so to speak. Because they don’t generally hire out of college, previous experience is always a plus, particularly in a similar industry. For instance, if you have a history working as an investment banking analyst, you can likely see yourself rising quickly in private equity jobs.

Some of the more senior roles at private equity firms can include:

  • Associates
  • Senior associates
  • Vice presidents (VPs)
  • Director (or Principal)
  • Managing Director (or Partner)

Associates can find themselves earning wages that start around $150,000, whereas more senior roles can easily take home greater than $500,000 per year. The private equity job description for each role can differ from firm to firm, but many things are fairly constant between each. For instance, there is a fairly standard two to three-year wait before an employee can be considered for promotion. Furthermore, once an employee reaches senior associate status, they may be eligible for carry (that is, a percentage of the profits from an investment).

What are the Best Entry-Level Positions at Private Equity Firms?

Again, the value of previous experience cannot be overstated if you want to find yourself in a stable career with private equity firms. The most entry level private equity jobs are in the position of the analyst, which carries many of the same responsibilities as the more senior associates, just with more supervision and less autonomy. For instance, analysts may work alongside an associate on sourcing private equity leads, fundraising, and researching potential investments, but they will likely be limited to only very specific tasks while also being closely monitored.

"Analysts are in high demand for private equity firms right now, based on the number of project requests we see from clients," states Gabe Galvez, co-founder of industry services firm CAPTARGET. Indeed, while it may be entry-level, it’s not a position to regard with disdain, as it’s the first step in a more lasting career with the private equity firm. In addition, extra coursework, such as getting a CFA (Chartered Financial Analyst), can help -- but only if you have prior industry experience. Otherwise, it may wind up being redundant.

How to Find a Private Equity Firm to Work For

Just like in all aspects of the economy, supply and demand is a very real consideration when trying to find private equity jobs. Because this career track is so highly cutthroat and in such high demand, it can be quite difficult to secure a position with reputable private equity firms. However, if you’re eager to learn about how to get a job in private equity, there are a few reliable ways to help yourself stand apart from the many others who are vying for the same private equity jobs. This can allow you to be the lucky individual who earns the coveted position of “analyst” (and maybe even later, associate or higher!) at a private equity firm. 

Rather than trying to find a private equity firm to work for, you should instead try to attract the headhunters to yourself. Notably, your education and your employment background do matter quite a bit. Even if you have experience working in a respected field, such as corporate law, this means very little to private equity firms looking to hire. Instead, you should make sure to focus your education and experience in relevant fields, such as an investment banking analyst. Employment at a bulge bracket or boutique banks, or through internships at different private equity firms, are both good examples of private equity companies’ expectations of potential hires.

With the right experience, you should be able to at least get your foot in the door for their on-cycle or off-cycle recruitment process. It’s also important to remember that the hiring process for both on-and-off cycle recruitment varies dramatically. For on-cycle hiring, establishing a positive rapport with the headhunter cannot be overstated. If they don’t like you, then you, unfortunately, won’t stand a chance of getting hired with the private equity firm they represent. They also tend to be very particular, and if a candidate does not fit their ideal employee criteria, then they will likely be promptly vetoed.

If you get hired during the on-cycle, then you may find yourself with a job offer almost right away, as the headhunters are very motivated to find their candidates during this process. However, after getting hired, you may not even find yourself starting your job for another year and a half to two years. Instead, you’ll be expected to continue to work at the bank where you currently hold employment during this timeframe. While this can seem like an almost unbelievably slow process, it’s actually quite common for most private equity firms. After all, if you’re wondering how do private equity advisory firms make money, it’s not by being careless in their hiring process. 

Conversely, you may aspire to get hired during off-cycle recruitment. Unlike seeking employment during the on-cycle, the process is markedly different, and it’s much more exacting. For off-cycle recruitment, you may not get the job offer that you want right away. Instead, it’s not uncommon to be interviewed for several months at a time, and you’ll be expected to meet everyone who works at the private equity firm, often many times. That said, once you get the job, you’ll be able to start immediately, rather than being required to labor at the bank for another year or two.

Is a Career In Private Equity a Good Fit for You?

If the entire hiring and recruitment process for finding a job at private equity firms seem wholly unappealing to you, and you’re not interested in doing the necessary work to earn such a role, then it’s best to trust your gut instinct. In these instances, private equity jobs may not be an ideal fit for yourself, and you may want to seek employment in another, more lenient industry. There’s absolutely nothing wrong with that, and in fact, it’s best to know what you want in a job before committing to a possible life with that career track.

That said, for those of you who believe this industry may be a great fit for you, then very few careers can be as financially and personally rewarding as one at a private equity firm. From the relatively flexible hours to the competitively high wages that they offer, choosing a career in private equity can be a very sound and solid decision -- one that can afford you both lasting job satisfaction and a comfortable lifestyle. With so many known benefits of pursuing a career at private equity firms, there’s no doubt that this industry may well be the perfect one for you.