Working at a Private Equity Firm

Private equity firms invest in companies that are not listed publicly and then work to expand or transform them. Private equity firms typically raise funds in the form of an investment fund with a clearly defined structure and distribution plan, and then they invest that capital into their targets companies. The fund’s investors are referred to as Limited Partners, and the look here private equity firm is the General Partner in charge of buying, managing, and selling the targets to maximize profits on the fund.

PE firms can be accused of being ruthless and pursuing profits at every cost, but they have years of management experience that allows them to boost the value of portfolio companies by improving operations and other functions. They can, for example guide a newly appointed executive team by guiding them through the best practices in financial and corporate strategy and assist in the implementation of more efficient IT, accounting and procurement systems to lower costs. They can also boost revenues and discover operational efficiencies, which can help them improve the value of their assets.

Private equity funds require millions of dollars to invest, and it can take them years to sell a company for a profit. As a result, the market is extremely inliquid.

Private equity firms require prior experience in finance or banking. Associate associates at entry-level work mostly on due diligence and financing, whereas junior and senior associates concentrate on the relationship between the firm and its clients. In recent years, the compensation for these positions has increased.