Working for a Private Equity Firm is one of the most sought after career options for professionals in finance. But do you know what is it really like to work for a Private Equity Firm? Find out below.
What are the jobs really about?
Investing to Generate Returns
Essentially, all jobs in a Private Equity Firm revolve around collecting money from various individuals and groups and then using that pool of money to invest in one or more businesses that will generate returns. After investing in a company, Private Equity Firms become part – owners of the business and are involved in overseeing operations, providing guidance and helping the company grow and become more profitable. Once the company fulfills its potential, Private Equity Firms sell their stake in the company for a profit.
Jobs in Private Equity Firms revolve around different activities including Fundraising (collecting funds from investors), Deciding where and how much to invest, Managing Investments (looking after operations/growth of company etc.) and Formulating an Exit Strategy (how and when to sell the stake in the company). As a professional in a Private Equity Firm, you would generally be contributing towards any one of these activities.
Find out about the Top 7 Careers in Finance.
Why do people work in Private Equity Firms?
Good Pay, Monetary Benefits
Working for a Private Equity Firm is a popular option primarily because of the extensive monetary rewards offered in this career. You will be paid well for your services as people who are hired in this industry have an exclusive skill – set. The salaries and pay is top – notch and is comparable to the best pay packages in the finance industry. Apart from that, you will also get the opportunity to make extra money in the form of incentives, bonuses and profit – cuts, all of which will add to your total income.
Find out about the Top 7 Money Making Careers.
Small, Close – Knit Work Environment
A big motivating factor behind people choosing to work in a Private Equity Firm is the presence of a close – knit environment at the workplace. Most Private Equity Firms do not hire a huge number of employees, which results in greater interaction with colleagues and a more comfortable atmosphere at the workplace. In most probability, the top managers will know you by your name and you will get more opportunities to interact and learn from them as well as show them your skills and potential.
Authority and Job Satisfaction
There is a tremendous amount of job satisfaction involved in working for a Private Equity Firm. You get the opportunity to help upcoming businesses and struggling companies grow and achieve their potential. Additionally, once you invest in a company, you are a part – owner and your opinions, decisions and ideas regarding the operations of the company are valued and paid heed to. This gives a sense of authority and power to Private Equity professionals, which adds to their job satisfaction and makes them feel like they’re doing something worthwhile.
What is it like to work in a Private Equity Firm?
Competitive Recruitment Process
As most Private Equity Firms like to have a small workforce, they only hire a limited number of employees. Due to the lack of vacancies and abundance of applications, the selection/recruitment process gets extremely competitive and it is generally very difficult to be recruited by a Private Equity Firm. Additionally, as most of the work in a Private Equity Firm involves dealing with large sums of money, they prefer to hire candidates with prior experience in the finance field such as Consultancy or Investment Banking, thus making the recruitment process even more competitive.
Find out what it is like to be Working in the Investment Banking Industry.
Long Hours, Workload
Working in a Private Equity Firm involves putting in long hours and dealing with a lot of work related stress on a regular basis. As a professional in this field, do not expect to have too much of personal time, particularly during the start of your career. It is not a rare sight to see professionals working for very long hours at a stretch, especially when they’re in the process of tying up investments or sales deals. Professionals who succeed in this field are the ones who are willing to dedicate their lives to their work by sacrificing their personal time and who do not have a problem with taking their work home in order to deal with the heavy workload.
Find out about the Top 7 Fixed Hours Jobs.
Interpersonal Skills
As a professional working for a Private Equity Firm, you would need to constantly deal with lots of different entities including your colleagues, seniors, companies, investment banks, investors etc. You would often be required to use your interpersonal skills while dealing with all these people to solve problems without allowing conflicts to develop. Professionals who succeed in this field are the ones who have exceptional interpersonal skills and who develop strong relations with people quickly.
Responsibility
Professionals who work in Private Equity Firms have to be responsible and accountable for their decisions as there is a lot of money at stake. For example, while deciding which company to invest in, an error of judgement can result in huge losses for the Private Equity Firm. Similarly, a mismanagement of the operations of a company you’ve invested in can turn a profitable venture into an economically unviable business. People who succeed in this profession are the ones who can deal with this immense amount of responsibility and who don’t get rushed into making decisions until and unless they’re sure of the consequences.
Constant Research
Private Equity Firms generally tend to limit themselves to companies in a particular set of industries. Working for a Private Equity Firm requires one to constantly research and be in touch with each and every development in the industry/industries you invest in. This involves analyzing present and future trends, understanding the dynamics of the industry, finding ways through which costs can be minimized and profits increases, staying aware of any law/legislation changes in the near future that can affect this industry etc. As a professional in this field, you will constantly be required to research about one industry or the other and you should always be willing to learn so as to be able to make correct and profitable decisions.
