Quick Summary: What do Private Equity Firms Look for in Potential Hires?

Gearing up for a career in private equity? 

Here's an overview of what Private Equity firms are looking for in potential hires.

1. Industry Experience

Private Equity firms tend to hire those who have had prior experience in relevant fields such as: 

• Investment banking

• Accounting

• Structured or leveraged finance

• Mergers and acquisitions (M&A)

• Corporate development/restructuring

• Corporate consulting

For Analyst positions, firms will usually consider individuals who have gained the above exposure from internships, part time work experiences, or even experience gained via university societies such as investment societies whereby individuals may have had exposure to real time case studies and have vetted potential investments. 

2. Good Academic Credentials

The most common undergraduate or postgraduate degrees for private equity professionals are:

• Accounting

• Business

• Finance

• Economics

• Degrees such as mathematics, science and engineering can also be valuable as they demonstrate strong analytical ability. 

Additional qualifications?

A Chartered Financial Analyst (CFA) qualification is often considered an advantage as well.

A Master of Business Administration (MBA) degree isn’t mandatory for Analyst or Associate roles, but could give you an advantage when you're applying for a more senior role, such as Vice President or Managing Director.

3. Analytical and Financial Modelling Skills

Private equity tends to be a more long-term investment strategy than hedge funds, with returns typically not being realised until at least 3 to 5 years after a deal has been signed.

This focus on long-term gains, along with the relatively low number of deals, means you’ll need to show an ability to perform deep analysis and evaluations of companies and markets.

The most critical skills sought by private equity firms include:

• Proficiency in Excel, PowerPoint, and other financial modelling or presentation software.

• A good understanding of valuation methodologies.

• The ability to source new deals through industry research and screening of potential buyout candidates.

• Coordinating the due diligence and research tasks performed prior to a transaction.

• Experience with large and complex private company transactions.

• Firms will value candidates who are team players with a strong work ethic. An entrepreneurial approach, strong complex problem-solving skills, and the ability to lead a team are also considered important.

4. People and Networking Skills

Working in private equity, you can expect to interact with many different bankers, law firms and consultants, both inside and outside of the location where you are hired. 

You’ll likely need to be able to manage and supervise other people. During a transaction, your ability to apply skills in communication, empathy and understanding will be critical to achieving the best outcome.

Over the course of your private equity career, strong interpersonal skills will only become more valuable, helping you to build a strong network of business contacts and attracting a steady flow of deal opportunities.

Lastly, joining a professional association in your local area or university is a great way to connect with career opportunities and to get to know the industry’s key influencers!