Working at a Private Equity Firm

Private equity firms invest in companies that are not listed publicly and then attempt to expand or turn them around. Private equity firms raise capital in the form of an investment fund that has a predetermined structure, distribution system and then invest it in their chosen companies. Fund investors are known as Limited Partners, and the private equity company is the General Partner in charge of buying and selling the funds to maximize returns on the fund.

PE firms are sometimes critiqued for being uncompromising in their pursuit of profits however, they usually have a vast management experience that allows them to boost the value of portfolio companies through operations and other support functions. For instance, they could guide new executive staff through the best practices in financial and corporate strategy and assist in implementing streamlined accounting try this web-site procurement, IT, and methods to reduce costs. They can also increase revenue and identify operational efficiencies which will help them improve the value of their assets.

Private equity funds require millions of dollars to invest, and they can take years to sell a business for a profit. The industry is therefore highly in liquid.

Working for an investment firm that deals in private equity typically requires prior experience in banking or finance. Associate entry-levels are primarily responsible for due diligence and finance, whereas junior and senior associates are responsible for the relationships between the firm’s clients and the company. Compensation for these roles has been on a rising trend in recent years.