How do I become a private equity analyst?
To become a private equity analyst, you will need a bachelor's degree in accounting, finance or a related programme and sometimes an MBA as well. Entry-level positions are available, but usually experience working in the financial sector is a requirement.
Private equity analysts often have a background in finance or accounting, and may have experience working in investment banking or consulting. They must have strong analytical skills and be able to effectively communicate their findings to senior management within the private equity firm.
Coming into private equity with no experience is impossible, so finding an internship or having previous experience in a related field is highly recommended. Private equity professionals can advance fast within a firm and typically start as junior associates or analysts.
A lot of limited partner private equity firms will hire undergraduates and then put them through the CFA. It's rare for direct investment firms to do the same. However, we also see a lot of junior investment bankers with CFA level one, as it shows both technical knowledge and evidence of commitment.”
Who is a Private Equity Analyst? A Private Equity Analyst or PE Analyst is a person who works primarily for private equity firms and conducts research, does ratio analysis, and gives interpretations on private companies. Use due diligence, financial modeling techniques, and valuation methods.
For the vast majority of first-year private equity associates, the base salary is around $135k to $155k. Then, based on fund performance, bonuses tend to range from 100% to 150% of the base salary.
For a student looking to break into one of the top 10 PE firms, your chance is 1 in 300 or 0.33%. To break into one of the top 10 hedge fund firms, your chance is 1 in 147 or 0.68%.
Age Range: You need several years of IB or a closely related field to get in, so we'll say 24-28. Private Equity Associate Salary + Bonus: Your salary + bonus will probably be in the $150K to $300K range, depending on the size of the firm and your performance.
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.
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.
Can you go from consulting to private equity?
On the bright side, after a couple of years at a top consulting firm, you won't have any issues translating your presentation skills to PE. In addition, at larger funds, you'll be interacting with Finance Directors and CEOs even at a junior level.
Private equity is somewhat of an elite club. The field is notoriously difficult to enter. Most top private equity firms want skilled employees who they don't have to spend a lot of time training. In other words, you won't stand much of a chance at getting into a top private equity firm without an MBA.
Private equity firms need to understand both process risk and code risk because both can impact a company's value and growth potential.
Private equity analysts spend a significant amount of time analyzing financial statements, conducting due diligence, and evaluating potential investment opportunities. They must be able to create financial models, assess market trends, and analyze industry data to identify potential risks and opportunities.
Private equity funds are illiquid and are risky because of their high use of debt; furthermore, once investors have turned their money over to the fund, they have no say in how it's managed. In compensation for these terms, investors should expect a high rate of return.
Private Equity Analyst Hours
To be conservative, I'll say the average range is 60 – 80 hours per week, with numbers at the top end of that range (or even above it) when a deal is in its final stages. Weekend work tends to be minimal, but it does come up when deals are in their final stages.
62% of job seekers rate their interview experience at BlackRock as positive. Candidates give an average difficulty score of 3 out of 5 (where 5 is the highest level of difficulty) for their job interview at BlackRock.
The estimated total pay range for a Analyst at S&P Global is £39K–£55K per year, which includes base salary and additional pay. The average Analyst base salary at S&P Global is £45K per year.
For many at BX, the day starts between 8:30 a.m. and 9 a.m. each morning and finishes whenever the work is done. (One former Blackstone analyst said staff will work until 9 p.m. when their managers are in the office.
As for hours, both private equity and investment banking can be demanding careers. 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.
Is it harder to get into private equity or investment banking?
Private equity offers a more attractive work/life balance but is also potentially even harder to break into. Like investment banking, PE also offers opportunities to move into asset management, hedge funds, venture capital, or other senior roles in finance.
Private Equity Career Training
PE firms are small, tight-knit, and full of extremely smart and highly motivated people.
Earning potential: While both consulting and private equity can be high-paying careers, private equity investors make more money given their ability to share in the upside of their deals (e.g. carry, bonus, etc.)
PRIVATE EQUITY WINS. Compensation. The package is often designed to attract investment bankers, who are better paid than strategy consultants. As a consequence, you should expect a significant increase in your total compensation package, up to 100% in some cases.
PE is all about deployment of capital via valuation of target companies, and return optimization based on the PE firm objectives. If you are the models person, the valuations person or the treasury person with multiple currencies exposures then a lot of math.
