Career Guide to Private Equity Jobs

A guide that tells you everything about private equity jobs

Author: Sevriano Battista
Sevriano  Battista
Sevriano Battista

Sevriano combines a deep expertise in finance and law with a proven track record in financial services and mergers & acquisitions (M&A). He excels in cutting-edge research and analysis, enabling him to uncover insights that drive decisions. His leadership style is visionary yet collaborative, creating an environment where teams are empowered to innovate and excel. Sevriano is a natural leader who will propel your organisation forward with intelligence, collaboration, creativity, and unwavering commitment to success.

Reviewed By: Patrick Curtis
Patrick Curtis
Patrick Curtis
Private Equity | Investment Banking

Prior to becoming our CEO & Founder at Wall Street Oasis, Patrick spent three years as a Private Equity Associate for Tailwind Capital in New York and two years as an Investment Banking Analyst at Rothschild.

Patrick has an MBA in Entrepreneurial Management from The Wharton School and a BA in Economics from Williams College.

Last Updated:September 2, 2023

What Are Private Equity Firms?

Private equity firms specialize in investment management. They acquire businesses by raising capital through high-net-worth individuals (HNWIs) and institutional investors, such as mutual funds, insurance companies, and pensions. 

This guide will outline essential private equity strategies, the skills associated with private equity, how a private equity firm operates, and the different private equity job roles and scopes. 

Private Equity is the category of capital investments made into private companies. Private companies are not listed on public exchanges (such as the New York Stock Exchange), therefore, investing in them is considered an alternative investment. 

The current largest, most noteworthy Private Equity firms include:

Generally, smaller boutique private equity firms work in smaller teams, are highly specialized in the companies they invest in, and handle smaller-dollar-amount deals.

Key Takeaways

  • Private equity firms raise capital from high-net-worth individuals and institutional investors to invest in private companies.
  • Private equity strategies include venture capital, growth equity, and buyouts, each with a risk level and investment approach.
  • To succeed, private equity professionals need a mix of technical skills (financial modeling, due diligence) and soft skills (communication, negotiation).
  • Private equity job roles progress from analysts to partners, with increasing responsibilities and compensation as one moves up the hierarchy.
  • Private equity offers unique advantages, such as direct access to management, diversification opportunities, and the ability to mentor and improve portfolio companies. However, the industry demands long working hours and high dedication.

Fundamental Strategies in Private Equity

There are three main private equity strategies:

  1. Venture capital
  2. Buyouts
  3. Growth equity

These strategies do not compete against each other but require specific skills to be successful, such as identifying the right M&A targets and analytical skills for auditing.

Each strategy illustrates one method a company can merge with or acquire their targets during different phases of business development. Companies are invested in or bought out during different stages of their life cycles. 

Strategies are important in private equity as it determines the timing of the investment, dynamics of management’s synergy post-transaction, and the level of risk involved in the investment. 

Venture capital is a high-risk investment strategy because of uncertainty. The growth equity strategy is lower risk as it requires a long financial history. Lastly, the buyout strategy is high-risk because of the expenses and organizational changes.

Venture Capital 

Venture capitalism entails investing in start-up companies that merely exist as an idea or a business plan, i.e., in the earliest stage of the company's life cycle.

This strategy is riskier when compared to others, as a start-up's lack of maturity presents uncertainty until the founders prove their ability to run a business that can turn a profit. 

Additionally, venture capitalists do not require a share of over 50% of the business, which can be attractive to the business's founders. 

Investors take a greater risk when investing in startups as opposed to well-established companies. 

However, when a start-up turns out to be the next big thing, the initial small investment can give a payoff worth millions or even billions. Consider Jeremy Liew’s early interest in Snap (the parent company of Snapchat).

By the time Liew wrote Snap its first venture capital check, Snapchat had less than 100,000 downloads. In 2017, when Snap went public, the company’s stock soared and was worth $24 billion, which increased the value of Liew’s company, Lightspeed VC, to over $2 billion.

Growth Equity

Moving down the line, growth equity comes into play later in a company's life cycle, specifically when it has established itself and requires additional funding to expand and grow. 

Unlike venture capitalists, this allows investors to analyze the company's financial track record to evaluate the investment, interview the company’s clients and analyze the quality of the products through customer reviews. 

How do firms focused on growth equity find their target businesses? Funding firms will keep tabs on the financial history of established companies for years, approaching them if an opportunity arises where they appear to need more funding to continue expanding. 

Alternatively, when companies approach growth equity investors, they need to produce a growth plan that gives investors a reasonable estimate for their return on investment. 

For instance, a company looking for growth equity funds may present that, to expand, they require funds for new office space, more staff, more equipment, upgraded technology, and so on to meet rising demand. 

All in all, growth equity may be a good strategy that presents less risk because the firm has more information to work with, and existing management may have more experience, making it easier for the investing firm to support and mentor.


At the latest stage along a company’s lifecycle, the buyout strategy may, for example, occur when a public company is bought in its entirety and taken private by their existing management team or another firm that bought them out. 

When a buyout occurs, the founders sell their shares and exit, allowing the management team or investors to buy the company’s assets and take control of the majority of the shares, replacing the founders. 

Buyouts are the most expensive strategy and take up the largest portion of the private equity funds space.  

There are 2 common types of buyouts:

1. In management buyouts

Investors or the existing management team buy the company’s assets and take over the majority of the company’s shares. 

This strategy can be good for companies looking to undergo internal restructuring and wants to go private before embarking on organizational changes. 

2. In leveraged buyouts (LBOs)

An investor, or the management team, borrows or loans either a part of or the full amount required to fund the buyout. Consider the Hospital Corporation of America, which was purchased in 2006 by KKR, Bain & Company, and Merrill Lynch.  

This strategy can be good for companies wishing to avoid spending too much capital. Both the acquiring and acquired firm are used as collateral for the loan, therefore, it wouldn’t chip away at the acquiring firm’s capital as much.

Buyouts are good if a company is trying to go private to restructure and improve internally to provide a good return on the investment it takes to buy out the company in the first place. 

Like venture capitalism, buyouts are a high-risk strategy and require thorough analysis and evaluation of the investment. However, if successful, restructuring and improvements that come from buyouts can produce billions in returns.

Career Guide to Private Equity Jobs: Skills

Like investment banks, the roles in a Private Equity firm are split into senior and junior roles, where seniors, such as fund managers, handle Key investment decisions, whilst juniors handle:

  • Sourcing deals
  • Writing reports
  • Preparing prospectuses

A key skill that most successful players in private equity have is solid analytical business skills. Intuition is key, too, as well as being able to network and negotiate potential investments.

The best stay on top of the market and overall economic trends is to have the full picture. The following are some of the technical skills required for PE:

  • Financial modeling
  • LBO modeling
  • M&A modeling
  • General financial analysis

Although technical skills are fundamental to success in finance, soft skills are also imperative. Private equity investing relies heavily on team effort within the firm and dealing with professionals outside the firm and in the portfolio companies.

Key soft skills include:

  • People skills
  • Management skills
  • Communication skills
  • Negotiation and networking skills

Roles in Private Equity Firms

Private equity firms require less staff than an investment bank and tend to attract the top talent in the finance industry with top-dollar salaries and extremely generous bonuses. This sounds great, but it also means cut-throat competition for the limited spaces. 

To succeed in a highly active team environment, ensure that you develop these soft skills to be a good team player. Being purely technically skilled will negatively affect forging relationships with other professionals, which is necessary for securing deals.

This section explains how the different roles work interactively, what their day-to-day tasks may be, the pay scale, the average years of progression to each role, what qualifications need to be met, and what the average age range is for these roles. 

The progression of the roles follows this list:

  1. Analyst
  2. Associate
  3. Senior Associate
  4. Vice President or Principal
  5. Managing Director or Partner


Applying to be an analyst at a private equity firm was not always available to fresh graduates. In the past, big banks would take in the smartest candidates, and private equity firms would handpick the ones that had been trained after a year or two.

Nowadays, analysts can be groomed by private equity firms themselves, and there is no need to go through investment banking training to be eligible to meet the role’s requirements. 

As the most junior role, you’ll leave the complex tasks to the seniors and get your hands dirty with the jobs that are fundamental to closing a deal, such as financially monitoring portfolio companies and managing and screening existing and new deals - You focus on deal execution.

Analysts focus on small parts of the deal rather than working through deals from start to end, they do the jobs seniors are too busy to do. Analysts also rarely take part in events to represent the firm.

Because of their task-specific role, as well as the high demand to join private equity firms, analysts are seen by the firm as a short-term asset and are not expected to remain in the company in the long term. 

The associate role is the first role that is partner-tracked, meaning a professional that has the potential to become a partner at the firm.

Analysts, as mentioned previously, are now being hired straight out of an undergraduate or MBA program, not only out of investment banking, management consulting, or the Big Four. 

This means analysts in PE are now more likely than ever to have no entry-level work experience prior to the role.

Some day-to-day jobs of an analyst include:

  • Cold-calling to source deals
  • Monitoring portfolio companies
  • Reviewing confidential information memorandums
  • Due diligence for the deal
  • Financial models

Analyst and associate tasks differ in the auditing process. Analysts review the potential investments by building simple financial models, researching the industry and competitors, as well as data gathering.

Associates communicate with other teams in the firm, such as accounting and legal, to begin the reviewing processes, and may use the existing model to create more in-depth ones if the potential investment progresses. 

Analysts are usually paid $100K to$150K USD. The pay moves up to $150-200K for investment banking analysts and $200K+ in megafunds in New York.

Associates and Senior Associates 

Associates deal with research, due diligence, financial modeling, and report writing. Upon arrival, the first skill associates learn to master is usually becoming proficient at preparing Excel spreadsheets. 

A task often assigned to associates is reviewing and summarizing confidential information memorandums (CIMs), where investment banks produce documents containing information regarding potential investment opportunities.

Other tasks given to associates are:

  • Monitoring the firm’s portfolio
  • Sourcing deals 
  • Handling transactions 
  • Conducting due diligence
  • Fielding phone calls from investors. 
  • Reviewing deals
  • Creating complex financial models

Most of these tasks and skills are picked up through on-the-job training, where associates go through a 2- to 3-year program that teaches them about the specialized work that undergraduate or post-graduate work experience doesn’t prepare you for. 

These programs are based on progressive learning, so associates take on more responsibilities as their skill levels increase.

The salary of associates varies from firm to firm but generally ranges from $150-$300K (24-28 age range) per annum and $250-$400K (28-32 age range). 

After the second or third year of work, associates usually start working towards an MBA (if one has not yet been obtained), which enables them to move up the chain to higher positions like senior associate, vice president, or principal.

Vice President and Principals

The vice president and principals play a significant role in the negotiation aspect of private equity deals with target companies. They also supervise associates and assist the managing directors and partners in crafting investment strategies.

Their key responsibility is maintaining a strong relationship with investment banks, business consultants, and other professionals that may become the source of leads to future investments. 

VPs play a more predominant role in deal execution, dealing with supervision over project managers and associates. 

Principals focus mainly on sourcing deals by being involved in important stages of negotiations in the deal, such as definitive agreements.

Annual salaries of VPs and principals vary from firm to firm but can be expected to range between $350-$500K (33-35 age range).

Lastly, principals tend to get paid more and are viewed as more credible workers at the firm, meaning more opportunities to represent the firm at events, fill in for partners, and partake in fundraising.

Managing Director (MD) and Partners

After a few years of working as a principal or vice president, you may move up to the managing director or partner role. Managing directors and partners are the chief representatives of the firm and the most senior role in private equity firms. 

The actual purchases by PE firms rely on the senior executives’ opinions and decisions, while partners are essentially the lifeblood of the firm, actively soliciting investors. 

This illustrates the managing directors’ role as driving the investors' funds in a profitable direction to generate a return on investment.

Similar to a hedge fund or mutual fund managers, managing directors and partners receive hefty salary compensations from fund profits as well as a percentage of profits. So, how much do they make?

In large private equity firms, the annual carried interest profit sharing for managing directors and partners can be $700K-$2M+ (36+ age range).

In terms of hierarchy, don’t expect more work/life flexibility as you progress, as the weekly hours stay the same as the years go by. Additionally, most workers find their progression plateaus at a certain level, causing them to seek higher-paying opportunities elsewhere.

This may come as a harsh reality to some, but the truth is that the majority of people aren’t suited for such high work intensity, with many hanging up their gloves as early as two years into the industry. 

A quick online search shows that the majority of newsletters and first-hand experience blog posts claim that three-quarters of once-aspiring analysts end up leaving their jobs, even in spite of pay hikes. 

60-70 hours per week at smaller firms with less pay and 80+ hours per week at megafunds are common. That works out to about 13 hours a day, assuming you work Monday to Saturday, taking only one day of rest in a full work week.

While that may seem unreasonable, it’s actually lucky in this industry, with most not even getting a day off each week.

Most bankers find they spend more time with their teams than with their families. This is a job for the serious, and the work hours are undeniably exhausting. Thus, creating team synergy and getting comfortable with being colleagues for the entire day is vitally important to the firm's success.


So, why work in private equity? Unlike public markets, a private market investor may have information advantages, such as direct access to management and greater visibility into a potential portfolio company. 

Furthermore, taking advantage of private companies is a great way to diversify portfolios outside of traditional investments such as exchange-traded stocks and bonds. The alternative class can create investment opportunities that produce much greater returns. 

In terms of the entire class of alternative investments, private equity only scratches the surface. 

Many other areas, have proven to come with their own sets of challenges, providing value in different ways, such as:

  • Hedge funds
  • Private debt
  • Commodities
  • Collectibles
  • Real estate

PE firms operate on a much smaller scale as opposed to investment banks. This means that upper- and lower-tier roles experience more interaction, creating an environment that promotes synergy and blurs the lines between seniors and juniors. 

As a junior at a PE firm, working closely with experienced seniors gives rise to more opportunities to gain knowledge and wisdom than working at other finance jobs in larger corporations, such as an investment bank.

Private equity’s unique blend of operations and finance makes many eager for a job in this industry. Funding aside, the relationship between a private equity firm and the companies it invests in can include mentorship and industry expertise.

Senior employees work closely with the founders of portfolio businesses to improve them. 

This is extremely beneficial for target companies because they are typically at a point in their life cycles where additional funding and knowledge are needed to support continual growth. 

All in all, a career in private equity can be fulfilling and rewarding, especially when managers can assist portfolio companies in achieving breakthroughs to reach new levels of profitability. 

To hit the ground running, it helps to arrive at interviews with an MBA degree and several years of experience under your belt. This would allow you to skip the few years of initial training required to get you up to speed.

Researched & Authored by Sevriano Battista | LinkedIn

Reviewed and edited by James Fazeli-Sinaki | LinkedIn

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