For those that don't know, private equity firms invest in a company, take a majority stake, improve the company and then exit their investment at a large profit. In order to magnify returns, PE firms make use of leverage (borrowed money) to conduct Leveraged Buyouts (LBOs).
Understanding Private Equity
Check out the video below for another overview:
Read a detailed guide to Private Equity on WSO.
How to Get a Job in PE?
There are several common paths to make it into private equity:
- Investment Banking - This is by far the most common way to get into top tier private equity firms. These firms recruit top analysts out of investment banking analyst programs. Analysts interview for PE shops early in their first year and then work at their banks for 2 years before moving over
- Direct from Undergrad - While less common, PE firms have been creating post undergrad programs to hire students direct from university. Learn how to jump straight to the buyside on WSO
- Consulting - Similar to banking, some PE shops recruit top candidates out of consulting firms as their skills are applicable to the management changes that are needed at PE holding companies
- Post MBA - After going through a top 10 MBA program, there is a chance to go through the PE recruiting process - however, this is less frequent as often times PE shops will prefer to hire candidates who worked in PE before going to get their MBA
how to break into private equity without experience?
It will be very difficult to get into private equity without experience in IB or PE and without having gone to a typical target school. However, it is not impossible to break into the industry. The best chance is to get a strong job in the financial services after you graduate and then attempt to move into investment banking laterally. This will require a great deal of cold networking and studying on the side of your main job.
Read more about cold emailing on WSO.
If you are able to successfully lateral into IB - then you can attempt to go through the more traditional PE recruiting process. It will be next to impossible to get into a PE shop without this (or consulting) experience. However, there are always exceptions to the rule therefore you should focus your energy on networking intensely with small and middle market private equity shops that might be willing to hire candidates in non-traditional ways.
Read More About PE Recruiting on WSO
- Consulting to Private Equity
- Path to PE Post-MBA w/o pre-MBA banking experience
- Wanna Jump Straight to the Buy Side?
Interviewing for Private Equity Jobs?
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