Pursuing A Career in Private Equity with an MBA

Pursuing A Career in Private Equity with an MBA

Acquiring a job in a private equity (PE) firm is a dream career for most of the finance graduates owing to its attractive compensation package. Yet, money alone is not a factor. A PE job can be compared to that of an entrepreneur where the PE professional sets a vision, raises capital and executes a business plan.

Usually, the professionals at private equity firms spend their time identifying the best companies for investment and deal closures. They receive broad exposure to business operations and high-level decision making at an earlier stage of the career by working with the management team on every issue related to human resources and acquisitions.

Let us see how to get into private equity with an MBA

Breaking into Private Equity jobs with an MBA

Breaking into private equity jobs with an MBA is far easier than without an MBA graduation. The main reason is that MBAs work on case studies and conduct consultancy projects. This allows them to have a broad knowledge of several industries and functions which is relevant to the job. It helps them to understand the long-term strategic needs of a company.

Moreover, several graduates have their internships cleared, or might have work experience in investment banking right after graduation and took an MBA later on. They have an understanding of the market working which is crucial to decide on deals closure and investment.

Another biggest store of value is the network. They get every chance to build their network with people working at Google, Microsoft, LinkedIn, bigger private equity companies, and, etc.  Henceforth, having an MBA puts the candidate ahead of the competition, while pursuing a career in private equity.

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The candidates having three to six years of work experience in investment banking, consulting, and private equity may get enrolled as senior PE Associate.

Job profile of Post-MBA Associate

  • Deal screening and modelling
  • Identifying, structuring, negotiating, closing, and managing investment transactions
  • Managing advisors of lawyers, accountants, and investment banks
  • Sourcing, underwriting, closing, and monitoring PE investments
  • Monitoring of the financial and operational performance
  • Performing advanced analytical and operational activities for existing investments and proposed deals

Career advancement

As years of experience increases, say six to eight years, the senior associates can get promoted as managing director depending on the caliber and excellency earned during the years. Some may even become the business partners, provided they share the capital investment.

Senior PE Associate Salary

The demand for MBA graduates in private equity jobs is high as compared to the supply and several enjoy a coveted spot. The candidates have to undergo extensive interview cycles that may last up to four months or more.

The MBA interns have the advantage of gaining above-average satisfaction scores at 8.2/10 and recommendation scores 14% higher than other interns.

In general, an MBA graduate works on 57 hours per week and spends 25% of the time in travel. An MBA graduate may look forward to ‘carried interest’ as they progress in the firm. The average compensation comes at US$215,020 and can go up to US$300,000.

In addition to MBA, the ability to conduct due diligence with strong project management skills are necessary.

The final note

The roles in this industry are challenging. Apart from MBA qualification, strong perseverance, dedication, and experience in dealings helps one to climb the career ladder.

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