Working at a Private Equity Firm

Private equity firms invest in businesses which are not publicly traded, and then work to grow or transform them. Private equity firms usually raise funds through an investment fund with a defined structure and distribution plan and put that money into their target companies. The investors in the fund are referred to as Limited Partners, and the private equity firm acts as the General Partner in charge of buying and selling the targets to maximize returns on the fund.

PE firms are often criticised for being ruthless in their pursuit of profits, but they often have a vast management experience that allows them to increase the value of portfolio companies by implementing operations and other support functions. For instance, they are able to guide new executive staff through the best practices of financial and corporate strategy and help implement more efficient accounting procurement, IT, and processes to cut costs. They also can find ways to improve efficiency and increase revenue, which is one method to enhance the value of their holdings.

Unlike stock investments that can be quickly converted to cash, private equity funds usually require millions of dollars and may take a long time before they can sell their target companies at profit. This is why the market is extremely inliquid.

Working for a private equity company typically requires previous experience in banking or finance. Associate entry-level associates are mostly responsible for due diligence and financials, while junior and senior associates are accountable for the interaction between the clients of the firm and the company. Compensation for these positions has https://partechsf.com/the-benefits-of-working-with-partech-international-ventures/ been on an upward trend in recent years.