Ideal Backgrounds for a Career in Private Equity
August 19, 2016 Leave a comment
There is no standard way of entering the private equity industry, but there are certain characteristics firms look for in an ideal candidate.
While private equity firms want people who are technically proficient, there are other important factors they consider as well. Success in private equity is related to having the ability to source deals, the ability to focus, industry knowledge, communication skills, and a strong work ethic.
Private equity continues to be an attractive career path for both recent graduates and experienced financial veterans. Firms are very selective about who and when they hire, typically taking on just a few new people each year.
If you’re determined to join the private equity industry, here’s what you need:
The private equity industry is very selective when it comes to educational backgrounds and will typically target graduates from top universities. Private equity firms have many applicants to evaluate during the recruiting process, so educational background is an easy first screening technique. In addition, the networking aspect of the industry is very important, so your business relationships matter.
Although it’s not required that you’re a finance major, your college degree should demonstrate strong analytical skills.
Private equity firms are also very picky about MBA degrees. Many MBAs in the industry come from Harvard, Wharton, Insead, and Stanford. Alex Crisses, managing director at General Atlantic, is a prime example of this, as he holds a B.S. in economics from The Wharton School of Business and M.B.A. from Harvard Business School.
When entering the private equity field, it’s typical for people to have two to five years of relevant work experience. This includes investment banking, strategic consulting, or corporate development.
It’s unusual for people to enter a private equity firm with just an undergraduate degree because most firms are small businesses that don’t have the time or resources to provide internal training. Although there are some notable exceptions at big equity firms, potential candidates with just an undergraduate degree should have completed several internships in strategy consulting, banking, or at other private equity firms.