03 aug Working at a Private Equity Firm

Private equity firms invest in businesses that are not publicly listed and then work to expand or transform them. Private equity firms usually raise funds through an investment fund that has a defined structure and distribution system and then invest that money into the target companies. Limited Partners are the investors in the fund, and the private equity firm is the General Partner responsible for purchasing, selling, and managing the funds.

PE firms can be criticised for being brutal and seeking profits at https://partechsf.com/cybersecurity-measures-to-protect-your-business/ all cost, but they have extensive management experience that allows them to enhance the value of portfolio companies by improving operations and supporting functions. For instance, they are able to guide new executives through the best practices in corporate strategy and financial management and assist in implementing streamlined accounting procurement, IT, and systems to reduce costs. They can also boost revenue and identify operational efficiencies that can help them increase the value of their assets.

Unlike stock investments which can be converted in a matter of minutes to cash, private equity funds usually require millions of dollars and may take a long time before they are able to sell a target company at an income. The industry is therefore highly liquid.

Private equity firms require experience in finance or banking. Associate entry-level associates are mostly responsible for due diligence and financials, while senior and junior associates are accountable for the interaction between the firm’s clients and the company. In recent years, the pay for these roles has increased.