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Your Private Equity Career Path

Private Equity WebinarsIf you are considering how best to chart your private equity career path, this article will help you get started on that journey to 9 West.  By this point, most readers are likely familiar with the standard private equity career path that is described in many articles, anecdotes from private equity professionals, and recruiters.  To summarize this typical private equity career path, I have condensed this into five common steps in the private equity career path:

1) Undergraduate Excellence: The typical private equity career path starts with a stellar undergraduate academic performance (majors vary, business is common but private equity firms also prize specialty and advanced study in mathematics, sciences, and even the arts).  In this stage, the individual tends to excel in business, investing, or otherwise awaken some interest in a career in finance and ultimately private equity.

2) Post-Undergraduate Experience: Around the end of undergraduate education, most large banks, consulting firms, and top firms dispatch representatives and recruiters to campuses across the country to lure top students to Wall Street or the world of business at large.   While there is some evidence that students are moving away to some extent from the time-worn path of investment banking, trading, and working in finance (in favor of, say, start-ups and technology firms) but overall, the salaries, signing bonuses, and career prospects offered by these financial firms remains a strong lure for recent grads, especially given the level of debt many students now carry.   During this time after graduation, most future private equity professionals work a couple of years in corporate finance, investment banking, or business consulting as an analyst.  This time allows them to receive plenty of on-the-job training and prepares them for the long hours, intensive projects, and lifestyle with which many private equity professionals are familiar.

3) Working Toward Private Equity: Depending on your chosen employer, you may start to develop a skill set that fits a particular area of private equity (assuming you have set private equity as a future goal) and you can start to build relationships, study the industry, and ideally even start to work with private equity firms, as some fortunate graduates do as investment bankers.  Whether by luck, a helping hand, or exceptional talent, some professionals manage to start working in private equity early on, before their MBA (or other advanced degree, which is a near-prerequisite for private equity).  This can be an amazing opportunity for someone looking to work in the industry long-term but eventually these professionals meet with less fortunate private equity aspirants in business school (or law school, as is sometimes the case but rarely by design).  The reason they would leave their private equity employer for an MBA is that many private equity firms have pre-MBA associates that remain in this junior position until they receive their MBA; the same goes for most investment banks, which see the MBA as a crucial step in the development of their future executives.

4) Completing Your MBA: Private equity firms look for top students from top business schools so it is important to give yourself the best chance at being seen by recruiters and future employers and landing at a top program (Wharton, HBS, Columbia, etc.).  During your MBA, you will most likely have your sights firmly set on working in private equity and you can gear your curriculum toward this goal.  In fact, a number of top business schools now have private equity clubs and even investment clubs that give students the chance to network, learn the industry, and even work alongside private equity firms on deals in a sophisticated internship model.

Your professors, advisors, and other relationships you build during your MBA will serve you well as you look for private equity jobs following your MBA so be sure to participate in your courses, take on extracurricular activities, and make progress toward your career goal during your time at B-School.  You should also have completed a summer associate program at a well-known, respected firm, ideally a private equity shop but it helps to gain more experience in a relevant position even if it is outside private equity.  A number of young private equity professionals and MBA students have decided to take our CPEP training program to further improve their private equity knowledge and training so that they can hit the ground running and advance in their private equity career.   You might also consider reaching out to private equity firms to see what they are looking for in particular from future hires so that you can ensure you are well-prepared for your career.

5) Finding a Private Equity Position:  Upon graduation, most top MBA grads have a few offers in hand from firms but you may not have the offers from the private equity firms where you want to work.  In this case, you will need to work your contacts, approach a number of firms, market yourself, and ultimately you might end up having to take a position outside private equity (hopefully still related) and hope to steer yourself back toward the industry over time.  Other graduates work for a smaller private equity shop or take a less suitable position simply to get exposure to the industry and hope to prove themselves along the way toward a better title at a bigger firm.  Once you find a position in private equity, you will likely surpass some of the very junior professionals but your career path is far from over as you will have to earn your way up the ladder at any firm.  Your MBA and past work experience, however, will help you accelerate your advance through the ranks.  At this level, the compensation is highly competitive for private equity professionals and the work experience is challenging, fast-paced, and exciting.

I hope you enjoyed this brief article charting the typical private equity career path.  Please note that this is only a boiled down version of the standard career path.  In almost every Private Equity Radio interview that I conduct, I ask the private equity interviewee how he/she made it into private equity so that others can better understand how to get into this exciting and lucrative field.  Most of the answers involve a few common steps like those highlighted above, but rarely does someone’s career path follow these steps exactly.  Some enter private equity after a successful stint at a top law firm, others join after working for a portfolio company, and many professionals take paths that seem completely unrelated to private equity.  In the end, it’s all about what the person can deliver to the private equity firm.

If you would like to advance your career and receive practical private equity training, you should consider the Certified Private Equity Professional program.

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