For many London School of Economics (LSE) students, private equity is the end goal. But as private equity hiring evolves, it can be unclear of the ‘correct’ path to take to get there.
At the school’s Alternative Investments Conference today, a managing partner at a large private equity firm gave some insight into how different paths can lead you to success. Their identity and affiliation is protected by Chatham House rules.
The traditional route into private equity involved two or three years in the analyst program of a major investment bank, followed by a top MBA, followed by a job as a private equity partner. Recently, though, top private equity firms (eg. Blackstone) have begun training their own graduates. Mid-market firms in the UK hire accountants. But the partner in question, said there's a third way into PE: consulting.
Consulting can be a good grounding for private equity careers. It “gives you that invincible confidence as a young person being put in a room with experienced people. You see what real companies do and what the challenges are, rather than the PowerPoint or Excel version of that,” he said.
But the perfect candidate has something extra again. The partner said his ideal recruit is someone who “has worked a few years in consulting, then two years in banking. Maybe McKinsey then Morgan Stanley then left to start a company and failed but learned a hell of a lot.”
Pigeonholing yourself into one pre-PE role can have its drawbacks. Only ever working for an investment bank means “you end up working a lot in the office and don’t get a lot of customer interaction,” he added.
He suggested that if you want to work in private equity, then what you study is less important than how you study it. Whilestudying economics and finance, the partner said, “I didn’t learn any new or valuable stuff. The thing I learned most there was working in teams with a really random set of people.”
Click here to create a profile on eFinancialCareers. Comment ANONYMOUSLY on articles and make yourself visible to recruiters hiring for top jobs in technology and finance.
Have a confidential story, tip, or comment you’d like to share? Contact:alex.mcmurray@efinancialcareers.comin the first instance.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)
FAQs
Demonstrating an astute understanding of the factors that influence successful investments, such as sound financial analysis, robust due diligence, and an ability to foresee potential growth drivers, solidifies your position as a promising candidate.
Can you do PE without IB? ›
While investment banking is by far the most common training ground for private equity, it is also possible to recruit for private equity roles after doing entry-level consulting, especially if you are a top performer at a top management consulting firm.
How do I get hired by a private equity firm? ›
Excellent grades and a notable transcript in school. (an MBA or advanced degree is not required but can be beneficial.) Previous experience is often required and encouraged. In addition, excellent networking skills would be beneficial when landing an interview with a PE firm due to its competitiveness.
What is the path to get into private equity? ›
Getting enough work experience and then completing your master's degree is usually a good way to get into private equity, but it requires careful planning, as most top private equity firms prefer to hire entry-level employees that are as young as possible, so they have much time to gain experience and fulfill their ...
Why are you a strong candidate for private equity? ›
Private equity firms are always on the lookout for candidates who can think outside the box and bring fresh ideas to the table. They want to know that you are able to analyze complex financial data, identify potential investment opportunities, and make sound investment decisions.
Why PE instead of IB? ›
People often argue that the only point of working in IB is to win exit opportunities. By contrast, you enter a field like private equity because you want to stay in it for the long term, advance up the ladder, and eventually become wealthy as a Partner or Managing Director.
Is PE more prestigious than IB? ›
While both careers are highly regarded and financially lucrative, the choice is personal. Investment banking is typically viewed as glamorous but also requires longer hours and the sacrifice of a personal life. Private equity is extremely prestigious.
Does IB or PE make more money? ›
Private Equity Analyst Salary + Bonus: You'll almost certainly earn less than an IB Analyst in terms of total compensation; your salary + bonus will likely be in the $100K – $150K range, with the bulk coming from your base salary.
Is PE really better than IB? ›
However, investment bankers tend to work longer hours, often working late into the night and on weekends. Private equity firms also tend to have a more relaxed work environment and offer more flexible hours. So, if you're looking for a career with less hours commitment, private equity may be the way to go.
Where do top PE firms recruit from? ›
Large PE firms target Investment Banking Analysts at bulge-bracket and elite-boutique banks, as well as a few In-Between-a-Banks.
Private equity firms usually seek someone with a strong sense of numbers. As such, the majors they generally look for include Finance, Accounting, Statistics, Mathematics, or Economics. GPA will, of course, be a factor here.
Is private equity stressful? ›
While the travel will be less, the work in private equity is very stressful and demanding, so the hours you actually spend working may be more stressful or mentally demanding.
How much does a VP in private equity make? ›
Private Equity Vice President Salary in California
| Annual Salary | Weekly Pay |
|---|
| Top Earners | $241,298 | $4,640 |
| 75th Percentile | $187,500 | $3,605 |
| Average | $143,004 | $2,750 |
| 25th Percentile | $113,500 | $2,182 |
The minimum investment in private equity funds is typically $25 million, although it sometimes can be as low as $250,000. Investors should plan to hold their private equity investment for at least 10 years.
Is private equity a prestigious career? ›
Working at a Private Equity Firm
The private equity business attracts some of the best in corporate America, including top performers from Fortune 500 companies and elite management consulting firms.
How many rounds of interviews for private equity? ›
Private Equity Interviews and What To Expect
That being said, almost all PE interviews have the following characteristics in common: Multiple Rounds: 2-3 rounds minimum (and sometimes many more!) where you speak with professionals at different levels of the firm.
How do I prepare for a private equity associate job? ›
Associates often have an data-centric background, are well-versed in financial analytics, and have specific work experience in a given industry. Because associates often network and fundraise, successful private equity associates also have strong soft skills in communication, negotiation, and public speaking.
Is private equity a stressful job? ›
but nowhere near as much as in management consulting. While the travel will be less, the work in private equity is very stressful and demanding, so the hours you actually spend working may be more stressful or mentally demanding.
Why do you want to apply for this role at Blackstone? ›
Professional Tone:- I am interested in working at blackstone.com because it is a leading investment firm with a global reach. I am attracted to the firm's commitment to excellence and its focus on teamwork.
