Why did you quit private equity?
“I had to sacrifice most weekends for quite a while.” He left PE to become an entrepreneur. “I enjoyed my time in private equity, but I also realized that I wanted to build my own business and put my own visions into reality,” says Bulkin.
The logic here is simple: you like investing, but you don't like all the process work, documents, coordination, and monitoring that comes with PE. You want to spend your time finding mispriced companies and assets, betting on them, and seeing your results in real time rather than waiting 5-7 years to sell.
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.
They are often seen as ruthless cost-cutters who gut companies and lay off workers in order to make a quick profit. And while it is true that some private equity firms do engage in these practices, it is important to remember that not all private equity firms are evil.
Those who wish to broaden their horizons or simply desire a change of pace will often migrate to similar sectors such as hedge funds or portfolio management. Additional exit options include: Being hired as a chief analyst by another firm. Starting a new private equity organisation.
Private equity comes with a few disadvantages. These include increased risk in the types of transactions, the difficulty to acquire a business, the difficulty to grow a business, and the difficulty to sell a business.
Private equity investors also face greater market risk with their investments compared to traditional investments since there's no guarantee that any of the small companies in which private equity firms invest will grow at all.
Private Equity Career Training
PE firms are small, tight-knit, and full of extremely smart and highly motivated people.
Age Range: You're unlikely to reach this level before your mid-to-late 30s, so we'll say 36+. But that's just the minimum – most Partners are likely in their 40s or beyond. Many MDs and Partners stay in private equity indefinitely because there's no reason to leave unless they're forced out or the firm collapses.
In private equity, you'll also be responsible for a lot of different tasks. The deal teams are lean and your decisions will have a high degree of permanence, which is why I'd say the stress level is overall higher in private equity than in banking. Very importantly, there's also no one around to check your work.
What is the curse of private equity?
It's known as the “winner's curse.” In private equity investing, it's when a winning bid to acquire a company exceeds its intrinsic value or worth.
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.
U.S. private equity aggregate deal value declined to $645.3 billion in 2023, down 29.5 percent from 2022 and 45.5 percent from 2021, as deal makers navigated dislocation in M&A markets catalyzed by higher interest rates and tighter debt markets1.
Most private equity associates stay in their positions for two to three years before being considered for a senior associate. Future roles at a private equity firm could also include Vice President/Principal before rising to Director/Partner.
| Private Equity Salary Data | ||
|---|---|---|
| 1st Year Associate | $135k – $155k | $275k – $385k |
| 2nd Year Associate | $160k – $180k | $330k – $450k |
| 3rd Year Associate | $180k – $200k | $360k – $500k |
| Senior Associate | $200k – $220k | $410k – $610k |
| 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 |
Private Equity Associate Lifestyle and Hours
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.
Private-equity firms typically run leaner operations than banks and so have less need to cut jobs during slowdowns. But some have laid off about 5% to 15% of their staff, said Sasha Jensen, founder and chief executive of Jensen Partners, an executive-search firm for alternative-asset managers.
So, if you're interested in finance and deal-making, investment banking is the way to go. If you're more interested in strategy and operations, private equity might be a better fit.
With this power, however, comes greater accountability, as they're more deeply involved as company shareholders. This can lead to greater stress in private equity than in consulting firms.
Is private equity high paying?
In short, if you're at a top mega fund, then you can expect to get paid between $350-$400k per year. These numbers reflect total compensation paid to private equity associates in 2022.
Both investment banking and private equity are demanding careers that require long working hours, although private equity firms tend to have a more relaxed work environment and offer a more flexible schedule.
Is It Hard to Get Into Private Equity? Yes! Private equity is one of the most competitive jobs to get – period. Not just in finance, but across the board.
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%.
The Key Persons are the individuals who the investors believe are critical to sourcing, making, managing and exiting from investments to maximize the investor's return. A lender providing a subscription facility to a fund is also concerned with that fund's management.
