The private equity investment process
- Rise money from limited partners (LPs) like pension and retirement funds, endowments, insurance companies, and wealthy individuals.
- Source, diligence, and close deals to acquire companies.
- Improve operations, cut costs and tighten management in portfolio firms
- Sell or exit portfolio companies at a profit.
Contrast to investment banking
- Given its highly lucrative offerings and the very limited job availability in private equity, the industry is full of many of the best and brightest
- While the skill-set needed is very similar to that of investment banking, in terms of modelling, valuation and deal origination, there is also a much greater focus on thinking about the big picture, on due diligence and on companies’ operational side.
- Typically, landing a private equity job requires at least one year of investment banking experience, but there are graduate programs or even internships available.