What does a private equity analyst do?
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.
Private equity analysts are responsible for helping private equity firms select which companies to invest in and manage their portfolios. They conduct detailed analysis of companies' financial performance, industry trends, and potential growth opportunities to determine whether an investment would be profitable.
Equity Analysts
They produce research reports, projections, and recommendations concerning companies and stocks. Typically, an equity analyst specializes in a small group of companies in a particular industry or country to develop the high-level expertise necessary to produce accurate projections and recommendations.
What are the most important Private Equity Analyst job skills to have on my resume? The most common important skills required by employers are Private Equity, Entrepreneurship, Financial Modeling, Analysis, Economics, Financial Analyst and Due Diligence.
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 Associates must be able to lead deal processes from start to finish without step-by-step instructions. They spend their time on sourcing – generating new deal ideas – as well as financial modeling and due diligence for active deals, portfolio company monitoring, and even some fundraising.
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.
A role in private equity is a very competitive yet rewarding career path. Getting started in a profession in private equity (PE) requires strong analytical and networking skills to jumpstart a career at a PE firm.
Most equity research analysts have a bachelor's degree in finance, accounting, economics, or business administration. Having a background in statistics and mathematics is beneficial for equity research analysts. Senior equity research analysts often have a master's degree.
Equity Research is all about finding the valuation of the listed companies on stock exchanges, while Private equity research and analyzing the private companies and interpreting your results.
How do you stand out in a private equity interview?
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.
Yes! Private equity is one of the most competitive jobs to get – period. Not just in finance, but across the board. Private equity firms have very specific requirements for their hire candidates, both for entry-level analyst positions and for higher-level job openings.
At many smaller funds and middle-market funds, you can expect to work 60-70 hours per week, mostly on weekdays, with occasional weekend work when deals heat up.
The carried interest arrangement is specific to the private equity firm, but in general, members of the investment team should not expect to receive any proceeds until at the very least reaching the senior associate level, which is still uncommon.
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.
Private equity firms are paid based on how much profit they can generate from their investments. They are given a portion of this profit, which is known as “carry”. The thing is, most associates don't get carry. At mega funds, it's essentially unheard of, and even at sub $1B funds, fewer than 1/5 of people get carry.
Heidrick & Struggle's data suggests that at the top end, a managing partner in a private equity firm with at least $1bn in Assets Under Management (AUM), can expect to earn at least $3.5m in salaries and bonuses, plus around $35m in carried interest over a fund's lifecycle (typically around five years).
Private equity investing often have high investment minimums, which can magnify gains but also magnify losses. Liquidity risk exists since private equity investors are expected to invest their funds with the firm for several years on average.
Candidates should have an bachelor's degree in an analytical major like finance, accounting, statistics, mathematics, or economics.
1. Investment Banker. Roles in investing banking are highly sought after. For investment bankers, it's often a higher competition to land a role in one of the largest firms.
Why not to work in private equity?
Unlike in a hedge fund, where an investor could be responsible for dozens of positions and the law of large numbers will help one out, private equity investors do so few deals at a time that a bad deal or two could significantly hurt your career.
Private Equity Career Training
PE firms are small, tight-knit, and full of extremely smart and highly motivated people.
While ZipRecruiter is seeing annual salaries as high as $133,500 and as low as $39,000, the majority of Private Equity Analyst salaries currently range between $79,000 (25th percentile) to $104,500 (75th percentile) with top earners (90th percentile) making $123,000 annually across the United States.
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.”
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.
