Working at a Private Equity Firm

Private equity firms invest in businesses which are not publicly traded and then attempt to grow or transform them. Private equity firms usually raise funds in the form of an investment fund that has a clearly defined structure and distribution system, and then they invest that capital into their target companies. The investors in the fund are known as Limited Partners, and the private equity firm serves as the General Partner in charge of buying and selling the targets to maximize profits on the fund.

PE firms can be accused of being ruthless and pursuing profits at all cost, but they possess vast experience in management that allows them to improve the value of portfolio companies through improving the operations and other functions. They can, for example, guide a new executive team by guiding them through the best practices in financial strategy and corporate strategy and help implement streamlined accounting, IT, and procurement systems to reduce costs. They can also identify operational efficiencies and boost revenue, which is a method to enhance the value of their holdings.

Unlike stock investments which can be converted in a matter of minutes to cash and cash, private equity funds generally require a huge sum of money and may take a long time before they are able to sell a company they want to purchase at an income. Because of this, the business is highly inliquid.

Private equity firms you can check here require previous experience in banking or finance. Associate entry-level associates are principally responsible for due diligence and finance, while junior and senior associates are responsible for the relationship between the clients of the firm and the company. Compensation for these positions has been on an upward trend in recent years.