Working in the private equity industry is considered a prestigious occupation. Most of these opportunities require an advanced degree, such as a Master of Business Administration (MBA), and are targeted to some of the most sophisticated investment minds — or at least to those with the most potential investment talent. This segment of the financial sector is mature across developed economies around the world, and private equity jobs are most compelling when transactions in the financial markets are robust.
Many jobs in the financial services industry are within large financial institutions. Private equity firms, however, are often small, boutique companies that maintain a certain corporate culture. As a result, these firms do not tend to hire in large numbers, and the opportunities for employment might be few and far between. A newly hired investment professional might be hired as a managing director. After being hired, however, a private equity professional could benefit from working with more experienced staff members and potentially advance to a more senior role, such as a senior managing director.
The private equity sector generates revenue by purchasing undervalued companies either outright or obtaining an ownership stake in them, holding on to the investment for five to seven years on average, improving the business operations in the meantime and finally selling the investment for what most likely is a lucrative profit. The sophisticated nature of the investment activity surrounding these deals is why private equity professionals are among the most highly compensated occupations in the financial industry. In addition to a base salary, investment professionals might receive a yearly bonus or earn a percentage on completed deals.
Private equity jobs vary depending on the makeup of the buyout firm, another term for private equity company. There are firms that are dedicated to a particular industry, such as energy or technology. Every investment or buyout will differ, but there are times when the expertise of the investment professionals within the private equity firm are called on to help turn around the investment's business operations. These types of private equity jobs are very specified and require the investment professional to have some knowledge about the industry in which they are making an investment.
There also are private equity jobs devoted to investment research. These professionals must vet potential investment opportunities and monitor performance of current investments in the private equity firm's portfolio. A private equity research career requires an ability to work independently but also to communicate findings to the portfolio management team. Private equity jobs in research require the ability to present opportunities to a firm's board of directors and to express verbally or in writing portfolio performance to investors.