Working at a Private Equity Firm

A private equity company takes an ownership stake in a company that isn’t listed publicly and seeks to turn the company around or expand it. Private equity firms raise funds in the form of an investment fund that has a predetermined structure, distribution system and then invest it in the companies they wish to invest in. Limited Partners are the investors in the fund, while the private equity firm is the General Partner, responsible for purchasing selling, buying, and managing the funds.

PE firms are sometimes accused of being ruthless in their pursuit of profit They often have an extensive management background that allows them to boost the value of portfolio companies by implementing operations and other support functions. They can, for example, guide a new executive team through the best practices in corporate strategy and financial planning and assist in the implementation of more efficient accounting, IT and procurement systems to cut costs. They can also boost revenue and improve operational efficiency, which can help them increase the value of their assets.

Private equity funds require millions of dollars to invest and they can take years to sell a company in a profit. The industry is https://partechsf.com/the-benefits-of-working-with-partech-international-ventures/ therefore highly in liquid.

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 focus on the relationship between the firm and its clients. Compensation for these roles has been on a rising trend in recent years.