Most Frequently Asked Private Equity Interview Questions And Answers - Buyside Hustle (2022)

Most Frequently Asked Private Equity Interview Questions And Answers - Buyside Hustle (1)

If you want to break into private equity, then you better make sure you are prepared for interviews right after you start your investment banking job. I know it may seem crazy, but typically interview season for private equity associate jobs start just a few months after you start working full time. You may have no idea what you want to do longer term, but because just about everyone else in your analyst class in gunning for a private equity job, you feel like you have to do the same.

To prepare for interviews, make sure you understand what a private equity firm looks for in a candidate and study up on the most common interview questions that these firms ask.

Contents hide

1 When to start preparing for private equity interviews?

2 Best background for a career in private equity

3 What qualities do private equity firms look for in a candidate?

(Video) Private Equity Interview Questions and Answers

4 Most common private equity interview questions and answers

4.1 Why private equity?

4.2 Why are you interested in working at [this firm]?

4.3 Walk me through your resume

4.4 Are you interviewing for other types of roles? Why private equity over hedge funds?

4.6 What is an LBO / Walk me through an LBO

4.7 Walk me through [XYZ deal] on your resume

(Video) What does it take to get a job in Private Equity?

4.8 What’s the best business you’ve ever seen and why?

4.9 What are the different ways to value a company?

4.10 What makes a good LBO target?

4.11 What are five ways that private equity firms create value?

4.12 Walk me through how the three financials statements link together

4.13 Working capital questions

5 Difference between private equity and hedge fund interviews

6 How to land a private equity job

(Video) Private Equity Real Estate Interview Mental Math Questions (& Answers)

When to start preparing for private equity interviews?

When I was a young investment banking analyst I had absolutely no idea what I wanted to do. At the time when I was in banking, private equity interviews started about seven months into my first year. Those who landed the best private equity jobs were the ones that prepared months in advance before interviews started.

Don’t procrastinate if you want to land a private equity role. Since interview season starts a few months after you begin your first job, you need to start preparing for interviews right when you start your first job in investment banking.

That said, if you are unable to land a job during the crazy interview season, all hope is not lost. I know plenty of people who landed private equity jobs after the initial rush of interviews. It is just a little bit harder given the interview process is not structured and firms are able to take their time before handing out offers. Your best bet is to break into private equity is on-cycle when all the firms are scrambling to find the best candidates.

Best background for a career in private equity

The easiest way to break into private equity is to start your career in investment banking. The fact is that 85%+ of people who work in private equity were investment banking analysts. The other 15% are primarily consultants who worked at McKinsey, Bain or Boston Consulting Group or people who broke into private equity right out of undergrad.

I don’t want to say it is impossible, but it is extremely hard to break into private equity without an investment banking background. You need to have a really good connection with higher ups in private equity if you want to break in without the typical background.

Given most private equity firms are thinly staffed, nobody is going to teach you all the basics you need to know to be good at the job. Investment banking provides the perfect foundation that gives you the skillset to do well in private equity.

PE firms want to see that you have the basic skills necessary to be a good Associate. You need to be good at:

  • Excel and PowerPoint
  • Understanding what makes a good private equity investment
  • Anything around the financial statements, accounting and valuation
  • Communication skills – need to be able to talk to management teams and run due diligence calls

What qualities do private equity firms look for in a candidate?

Before beginning the interview process, you need to understand the type of candidate that private equity firms love to hire. These are the common traits that any type of buyside job looks for, whether you are interviewing for a private equity or a hedge fund role.

  • Confident but humble
  • Hard working / good work ethic
  • Analytical mindset
  • Easy to work with
  • Good attitude
  • Good technical skills
  • Intellectually honest
  • Attention to detail
  • Curious

The work you do as a private equity associate is not really that hard as long as you are okay with working hard. You get good at most jobs after just a year of working there, especially as a junior employee. The hard parts of being successful in private equity come in later when you need to build relationships to find deals and put real money to work.

Most common private equity interview questions and answers

Now that you know what private equity firms look for in a candidate, the next step is to make sure you don’t say something stupid during the actual interview. Below are the most common interview questions a private equity firm will ask you. I guarantee these questions will constantly come up once you start going through the interviews.

Why private equity?

Do not say that you want to make a lot of money. Yes, private equity professionals can make a ton of money, especially as you get promoted and start to get carried interest in the fund (more about private equity salaries and bonuses here). You need to be able to convince the interviewer 1) why you don’t want to work in investment banking longer term and 2) that private equity is actually what you want to do because you are interested in investing and learning about businesses. There are a lot of private equity professions who quit their jobs even though they make upwards of $500K per year, so money is not a good answer to this question.

  • “I have been fortunate to be in able to work at [XYZ bank] where I have able to learn a ton about [XYZ industry]. And what I have realized is that the parts of the job I really enjoy are learning about new businesses and industries, their fundamentals and really understanding what drives their growth/performance over the longer-term. And that is why I want to transition to private equity because not only are you are constantly looking at new industries and potential businesses to acquire, you also get to focus on figuring out different ways to create value longer-term.”

Why are you interested in working at [this firm]?

This one you need to do some research for and figure out what makes the fund you are interviewing at unique.

  • “[XYZ Firm] is one of the only private equity firms out that has been extremely successful in adapting to changes in the consumer environment. When I look at your portfolio, traditionally it seems like you guys had a ton of exposure to retail, but now you’ve been able to pivot away from that to service based businesses that benefit from changes we’ve seen in consumer spending habits over the last decade. Consumers are now spending more on experiences these days. So, I think you guys are one of the few that have been able to adapt to the change in trends
  • Secondly, it seems that you guys are really open to growing talent from within – As I look at the investment team there are a lot of partner that started out as associates at the firm – and that is not something you usually see at many private equity firms.”

Walk me through your resume

This is self-explanatory, you should be prepared to answer this question in any interview. Don’t memorize what you are going to say because you will bore the interviewer. Sound excited to be there, walk through all the important parts of your background, the experience you are getting in your current role and end with why you want to transition into private equity.

Are you interviewing for other types of roles? Why private equity over hedge funds?

Here the interviewer is trying to gauge how serious you are about a career in private equity, or if you are just one of those candidates who interviews at every firm hoping to land a spot. It is understandable if you are interviewing at all the different buyside shops, hedge funds/private equity/venture capital, but you should make it known to the interviewer that private equity is your sole focus after investment banking. Learn more about the differences between HF/PE/VC to figure out what career path is best for you.

  • “Hedge funds these days are becoming increasingly short term oriented. From the people I have talked to that work at hedge funds, they seem to be focused on the next 6 to 12 months, which to me seems extremely speculative. In private equity you get to take control positions in businesses and really think about how to drive value over the long run, which is an investment style that is much more interesting to me.”

What was said on your mid-year/year-end review?

Now because on-cycle private equity interviews start before your mid-year reviews, you may not have been given any formal feedback that you could use in interviews. If you are recruiting later in off-cycle, then you should be able to explain what your strengths and weaknesses are.

(Video) Finance Interview Questions: Buy-side

Here you should definitely point out if you were a top bucket ranked analyst [link]. If you weren’t then I wouldn’t mention it. But if the interviewer asks what rank you were, then you should be truthful and explain why you didn’t receive a top bucket rank. Explain that top bucket ranking is not given out freely and usually given to people who were lucky to work on a big deal for the firm. When it comes to deal flow, most people understand that there is an element to lucky involved with whether a big deal closes or not.

  • “My review went well. This past year, I was fortunate to be given a lot of responsibility with the [XYZ deal] and was ranked top bucket. During my review I was told that my deal teams said I was a good team player, did a great job on all the technical work/financial analysis and was able to work independently without much guidance. In terms of my weaknesses, initially the first 6 months into the job, my one area of improvement was to communicate more and raise potential issues and analytical findings more often. I was still getting used to the role and being comfortable around my team, so it was an area that I focused on afterwards and have been able to speak up more and share my own opinions.”

What is an LBO / Walk me through an LBO

Easiest way to really know how to answer this question is to build an LBO model yourself and see the different parts and how everything flows through.

  • “An LBO is an acquisition of a company with the use of a mix of both debt and equity. Usually debt makes up ~60% of the purchase price of the company while the sponsor puts in the remaining 40%. Over time, the cash flows of the business are used to pay down debt, creating value for equity holders when the business sells years down the road.”
  • “An LBO starts with assumptions around the EBITDA multiple paid and the sources/uses of cash/debt used to fund the acquisition. Then you project out the three statements over the next 5-10 years and make assumptions around debt paydown and equity distributions to the sponsor in any given year. Lastly, you assume some terminal value based on an EBITDA exit multiple and calculate an IRR based on the cash flows remaining to the equity holders.“

Walk me through [XYZ deal] on your resume

Make sure you know everything there is to know about the deals you list on your resume. I guarantee you won’t get the job if you try to BS your way through your deal experience.

These are the metrics to know off the top of your head for each deal:

  • Financial Metrics: EBITDA, EBITDA margins, historical and future revenue growth CAGR, leverage
  • Valuation Metrics: EBITDA multiple, market capitalization/enterprise value, comparable company multiples, precedent transaction multiples
  • Other key items: deal rationale, industry characteristics, strength/weaknesses of the business, is the company a good LBO target (why or why not)?

If the deal was a merger of equals, then you need to know these stats for both the acquiror and the target. Make sure to outline these key stats and information for each deal so you can easily memorize them. Also, be sure to talk about your involvement in the deal (i.e. led the financial model/valuation analysis, analyzed strategic alternatives, researched the peer/industry landscape, etc.).

What’s the best business you’ve ever seen and why?

Find a good business that has predictable recurring cash flows, high growth potential, low capex needs and a strong competitive advantage. Don’t pick one of the FANG stocks since they are so obvious.

Bloomberg is a good example of a really good business that most people don’t think about.

  • Have a monopoly on the market for the past three decades, allowing them to charge a subscription fee of ~$25K per terminal each year
  • Large competitive moat due to network effects of the instant Bloomberg messaging platform – if people want quick access to existing and future clients, they need to have the messaging platform.
  • Little capex or working capital needed to scale. Adding another terminal doesn’t cost anything.

What are the different ways to value a company?

You should know this from your investment banking interviews. Make sure you are able to talk through each of these valuation techniques if asked. Know the pros and cons of using each methodology.

  • Discounted cash flows
  • Precedent transactions
  • Comparable public multiples
  • Sum of the parts
  • LBO

What makes a good LBO target?

  1. Low capex and working capital needs
  2. Multiple ways to win – ex. organic growth (from industry or ability to take market share), accretive M&A, increase customer penetration, expense reduction/margin improvements
  3. Non-cyclical recurring cash flows
  4. Sustainable industry growth tailwinds
  5. Strong market position (#1 or #2 player in the industry)

What are five ways that private equity firms create value?

  1. Leverage / debt paydown with the use of cash flows – Classic leverage buyout value creation. PE firms usually put 40% equity in a deal and take on 60% debt. Over time the cash flows of the business pay down the debt, creating equity value to the equity owners
  2. EBITDA growth through topline growth / M&A
  3. Margin expansion – businesses usually aren’t run as efficiently as they can be. PE firms like to cut costs and drive synergies from M&A
  4. Multiple expansion – a lot of PE firms start off with a small business that they acquired for ~6x EBITDA and grow it to scale, selling a much larger, more attractive business down the road for a double digit multiple
  5. Dividend recapitalizations – one of the most common ways to extract value without having to sell a portfolio company

Walk me through how the three financials statements link together

This is another question you should know from your banking interviews. A lot of private equity interviews will ask questions around the financial statements and how everything flows through. For example, you could get asked questions regarding how a certain change on the income statement or balance sheet (i.e. changes in revenue growth, D&A, debt) impacts all the three statements in Year 0 and in Year 1.

If asked how the three statements are linked together and how everything flows through, then start with the income statement, move to the cash flow statement and end on the balance sheet where you tie it all out.

  • Income statement
    • Balance sheet: D&A links to PPE and intangible assets on the balance sheet, interest expense links to long-term debt on the balance sheet, net income flows through shareholder’s equity.
    • Cash flow statement: Net income, interest expense and D&A link to items in the cash flow from operations
  • Balance sheet
    • Any working capital item in current asset/liabilities links to items in cash flow from operations, ending cash balance links to cash at end of period on the cash flow statement, PP&E links to both D&A in cash from operations and capex spend in cash from investing activities
  • Other random items
    • Stock based compensation on the cash flow from operations (and embedded in G&A on the income statement) links to AOCI on the balance sheet
    • Dividends in cash flows from financing links to shareholders equity on the balance sheet

Working capital questions

If accounts receivable/inventory increases (or if accounts / payable / accrued expenses increase), how does that impact working capital and free cash flow?

There will always be some questions around changes in working capital. Be able to know the cash impact if any of the current assets or current liabilities items go up or down in a given period. If current assets increase, then that is a cash outflow versus if current liabilities increase that is a cash inflow.

Difference between private equity and hedge fund interviews

Now the big question you need to answer before beginning interviews is if you want to go the hedge fund route or the private equity route. You should absolutely not try to interview for both types of positions. You will already have a lot on your plate form being an investment banking analyst, so you need to focus on which path you want to take.

Recruiters want to see that you are laser focused on getting a private equity job before they introduce you to their clients. If you say you aren’t sure or are interviewing at both hedge funds and private equity, then you will not be a top candidate for them.

Hedge fund interviews are typically a lot less structured given there is no set recruiting process like there is in private equity. Hiring usually is concentrated in the first few months of each year, but there are a good number of hedge funds that hire on an as needed basis throughout the year. More on hedge fund interviews here.

For private equity as mentioned before, there is one big time of year for interviews in the fall during your first year as an investment banking analyst. This is where most people land their jobs and the best time to do so as most firms feel rushed to give out offers before the best candidates are taken by other firms. If you don’t land a position during this time, don’t sweat it. You still have a year and a half to find a private equity job and there are a good number of firms that recruit in the off season.

(Video) Elevate x Georgetown - Investment Banking & Private Equity Workshop

How to land a private equity job

With any goal in life, you need to have laser focus on what you want to accomplish. Follow these steps to find and get that job you love and don’t make any of the common resume mistakes in finance.


FAQs

What questions do they ask in a private equity interview? ›

Fund strategy & positioning
  • How many funds and/or product lines does the firm operate? ...
  • Which kind of assets does the company invest in? ...
  • What is the fund's investment strategy? ...
  • What is the size of the fund? ...
  • Which stage of the company's lifecycle does the fund invest in? ...
  • Where is the fund present?

How can I impress in private equity interview? ›

Good answers suggest to the interviewer what you can bring to the company. Check out recent deals, target companies, and say something that shows a genuine interest in the company you want to work for. “Summarize your experience in the context of their firm – why are you going to be useful to them?” advises McManus.

How difficult are private equity interviews? ›

Private equity interviews can be challenging, but for most candidates, winning interviews is much tougher than succeeding in those interviews. You do not need to be a math genius or a gifted speaker; you just need to understand the recruiting process and basic arithmetic.

How many rounds are in a private equity interview? ›

Private equity or leveraged-buyout funds usually conduct three to four rounds of interviews. For junior positions, however, the interview rounds could sometimes be as few as two.

How much do private equity analysts make? ›

Most Analyst roles in private equity pay lower salaries and bonuses than Analyst roles in investment banking; total compensation might be between $100K and $150K USD in New York, with lower figures in smaller cities and outside the U.S. By contrast, IB Analysts might earn total compensation between $150K and $200K USD.

Are private equity interviews technical? ›

Unlike investment banking interviews where you'll likely get a lot of technical interview questions, private equity interviews will stress the Paper LBO and LBO Modeling Test to confirm you've got the technicals down.

What should I study for private equity? ›

Candidates should have an bachelor's degree in an analytical major like finance, accounting, statistics, mathematics, or economics. Private equity fund management requires technical ability to analyze financial performance and estimate the value of a private company.

Why do you want to work for PE? ›

A well thought out answer should: Show your passion for and knowledge of the PE industry. Demonstrate your wish to apply your skillsets to building businesses and creating value. Establish your rationale for choosing PE specifically, as opposed to investment banking or a hedge fund.

Is private equity fast paced? ›

First, private equity is a more long-term approach to investing whereas hedge fund investing can be a more fast-paced environment. A private equity fund typically has an investment time horizon of 3 to 5 years with the life of the fund reaching the latter part of this timeframe.

Why is LBO the floor valuation? ›

To recap, a LBO model is often called a “floor valuation” as it can be used to determine the maximum purchase price the buyer can pay while still reaching the fund specific returns thresholds.

How much do private equity guys make? ›

Private Equity Associate Salary + Bonus: Your salary + bonus will probably be in the $150K to $300K range, depending on the size of the firm and your performance. Some of the large funds may pay more than $300K, but we're using the 25th percentile to 75th percentile range as a reference here.

Is private equity prestigious? ›

Private equity is extremely prestigious. Compensation for both careers is very high, but the work/life balance in private equity is better, it is often the preferred exit route for investment bankers who have a few years of experience.

Is private equity a good career? ›

A career in private equity can be highly rewarding, both financially and personally. Private equity managers often take a great deal of satisfaction from successfully guiding their portfolio companies to new high levels of profitability.

How long is private equity interview process? ›

A typical interview process will last 3 to 5 rounds (including the headhunter) with most rounds consisting of numerous individual interviews. Because the competition will be very strong, intense preparation in this phase of the recruiting process will be crucial.

What is the difference between hedge funds and private equity? ›

Hedge funds are alternative investments that use pooled money and a variety of tactics to earn returns for their investors. Private equity funds invest directly in companies, by either purchasing private firms or buying a controlling interest in publicly traded companies.

Can you go from consulting to private equity? ›

There are two primary paths for consultants into the Private equity industry: the operations team and a portfolio company (while a small portion of consultants end up working in an Investment Team, firms primarily target individuals with investment banking or Private equity backgrounds for these roles).

What should you not ask in an interview? ›

Questions to avoid in an interview:

Never ask about pay, time off, benefits, etc. (Wait until later in the process to inquire about these things.) Never ask “What does your company do?” • Never ask “If I'm hired, when can I start applying for other positions in the company?” • Never ask how quickly you can be promoted.

How do you handle stress and pressure? ›

Common stress management strategies include:
  1. Staying positive.
  2. Using stress as a motivator.
  3. Accepting what you can't control.
  4. Practicing relaxation methods, like yoga or meditation.
  5. Choosing healthy habits.
  6. Learning how to manage time better.
  7. Making time for your personal life.
29 Jun 2021

How much are bonuses in private equity? ›

For the vast majority of private equity associates, the base salary is around $135k-$155k. Then, based on fund performance, bonuses tend to range from 100% to 150% of the base salary.

How many hours do you work in private equity? ›

Private Equity Associate Lifestyle and Hours

At many smaller funds and middle-market funds, you can expect to work 60-70 hours per week, mostly on weekdays, with occasional weekend work when deals heat up.

Is private equity hard? ›

I'll tell you right now, private equity is a pretty hard and busy job. Any deal-oriented job is going to involve intense, short sprints and private equity is no exception. It's not quite at the level of investment banking hours, but you'll still be working a lot.

How does an LBO model work? ›

Structure of an LBO Model

In a leveraged buyout, the investors (private equity or LBO Firm) form a new entity that they use to acquire the target company. After a buyout, the target becomes a subsidiary of the new company, or the two entities merge to form one company.

Is private equity A fund? ›

Similar to a mutual fund or hedge fund, a private equity fund is a pooled investment vehicle where the adviser pools together the money invested in the fund by all the investors and uses that money to make investments on behalf of the fund.

What questions do they ask during interview? ›

50+ most common job interview questions
  • Tell me about yourself.
  • Walk me through your resume.
  • How did you hear about this position?
  • Why do you want to work at this company?
  • Why do you want this job?
  • Why should we hire you?
  • What can you bring to the company?
  • What are your greatest strengths?
2 Sept 2022

How can I get into private equity with no experience? ›

If you can't score an internship or a first job in private equity, try a related field like venture capital, investment banking, or asset management. These firms also have little interest in hiring inexperienced business school graduates, no matter how bright. Once again, this is a function of supply and demand.

How much does a VP in private equity make? ›

Salary Ranges for Vice President, Private Equities

The salaries of Vice President, Private Equities in the US range from $200,000 to $400,000 , with a median salary of $349,000 . The middle 67% of Vice President, Private Equities makes $349,000, with the top 67% making $400,000.

Is CFA necessary for private equity? ›

Otherwise, to be selected by a top-notch private equity firm, you need to have outstanding skills and experience in private equity. Chartered Financial Analyst or CFA – Another qualification you can aim for is CFA. Now, CFA is not for the faint-hearted.

Why do you want to work for this company? ›

Express your personal passion for the employer's product/service/mission. Employers want to know you're passionate about what they do, whether it takes the shape of a product, a service, a mission, or a brand. You can also connect your passion to the company's core values, which can often be found on their website.

Why do you want to apply for this role? ›

'I see the role as a way of developing my career in a forward-thinking/well-established company/industry as…' 'I feel I will succeed in the role because I have experience in/softs skills that demonstrate/ I've taken this course…' 'I believe my skills are well-suited to this job because…”

Why is growth equity exciting? ›

Why growth equity is attractive. Unlike venture capital and buyout, growth equity is an appealing form of investing to many prospective applicants because it offers the chance to invest in businesses that are fast-growing AND are established enough to allow quantitative analysis and financial modeling during diligence.

Is it better to work in private equity or hedge fund? ›

Hedge fund compensation is more variable than private equity salaries + bonuses, but at the junior levels, you'll most likely earn a bit more in private equity. At the top levels, a star hedge fund PM who has a great year could easily earn more than an MD in private equity – depending on the fund size and structure.

What is private equity in simple terms? ›

Private equity, in a nutshell, is the investment of equity capital in private companies. In a typical private equity deal, an investor buys a stake in a private company with the hope of ultimately realising an increase in the value of that stake.

Does private equity work long hours? ›

Typically, private equity investments are high-stakes ventures; if you're helping to manage a billion-dollar stake in a major company, you'll be held responsible for the outcome. At the analyst and associate levels, or in any support role, you can expect long hours—8 a.m. to 7 p.m. wouldn't be seen as onerous.

What is the IRR in an LBO? ›

An LBO transaction is evaluated by calculating an internal rate of return (IRR). The IRR compares the equity investment upon exit versus the amount invested at entry and calculates an annualized return on the investment.

Who holds the debt in an LBO? ›

The purchaser secures that debt with the assets of the company they're acquiring and it (the company being acquired) assumes that debt. The purchaser puts up a very small amount of equity as part of their purchase. Typically, the ratio of an LBO purchase is 90% debt to 10% equity.

What is LBO vs M&A? ›

As the name suggests, LBOs use leverage, or debt, to finance a large part of the purchase price. Unlike an M&A model where the acquirer is often a strategic buyer, the private equity firm is more return-driven, and the LBO model is, therefore, more focused on the Internal Rate of Return (IRR) of the transaction.

How much do first year private equity analysts make? ›

Analysts can expect to earn a total cash compensation (base salary and bonus) in the range of $100,000 to $150,000, with most of it coming from the base salary and the bonus averaging around 70% of the base.

Does private equity have work life balance? ›

Private equity work life balance may be very hard to achieve, especially when you're just starting out in this career. It would seem that making a lot of money would offset any issues regarding a good work life balance.

What is the highest paying job in finance? ›

List of the Best Highest-Paying Jobs in Finance Degree
  • Investment banker.
  • Financial Analyst.
  • Personal Finance Advisor.
  • Financial Manager.
  • Financial Risk Manager.
  • Economist.
  • Private Equity Associate.
  • Hedge Fund Manager.
7 Aug 2022

Who is the largest private equity firm? ›

The Blackstone Group

Since it was founded in 1985, it has become the biggest private equity firm in the world, managing assets worth over $648 billion. It has raised an impressive $58.3 billion over the past five years.

Is private equity more prestigious than investment banking? ›

Compared to investment banking, exit options are a bit more limited for private equity professionals. Private equity is the tier 1 among finance careers, so there are few exit opportunities more prestigious than private equity.

Is it hard to get into Blackstone? ›

Blackstone's president reveals how to nail an interview and get hired at the PE giant, where its first-year analyst acceptance rate is under 0.5%

What do you call someone who works in private equity? ›

Analysts and associates form the foundation of a private equity firm. They are the entry-level position, and their job is to help manage many different streams of work across the firm. Usually, they're supporting deal sourcing and deal execution in the process of buying new companies or selling portfolios.

How do you break into PE? ›

Consider these ways to get a job in the private equity industry:
  1. Get into private equity right out of college. ...
  2. Get a master's degree. ...
  3. Transition from an engineering career to one in private equity. ...
  4. Transition from a consulting, accounting or investment banking role.

Are private equity interviews technical? ›

Unlike investment banking interviews where you'll likely get a lot of technical interview questions, private equity interviews will stress the Paper LBO and LBO Modeling Test to confirm you've got the technicals down.

What should I study for private equity? ›

Candidates should have an bachelor's degree in an analytical major like finance, accounting, statistics, mathematics, or economics. Private equity fund management requires technical ability to analyze financial performance and estimate the value of a private company.

What questions do they ask during interview? ›

50+ most common job interview questions
  • Tell me about yourself.
  • Walk me through your resume.
  • How did you hear about this position?
  • Why do you want to work at this company?
  • Why do you want this job?
  • Why should we hire you?
  • What can you bring to the company?
  • What are your greatest strengths?
2 Sept 2022

What is the difference between PE and VC? ›

Key Takeaways: Private equity is capital invested in a company or other entity that is not publicly listed or traded. Venture capital is funding given to startups or other young businesses that show potential for long-term growth.

Can you go from consulting to private equity? ›

There are two primary paths for consultants into the Private equity industry: the operations team and a portfolio company (while a small portion of consultants end up working in an Investment Team, firms primarily target individuals with investment banking or Private equity backgrounds for these roles).

How does an LBO model work? ›

Structure of an LBO Model

In a leveraged buyout, the investors (private equity or LBO Firm) form a new entity that they use to acquire the target company. After a buyout, the target becomes a subsidiary of the new company, or the two entities merge to form one company.

Is private equity A fund? ›

Similar to a mutual fund or hedge fund, a private equity fund is a pooled investment vehicle where the adviser pools together the money invested in the fund by all the investors and uses that money to make investments on behalf of the fund.

How much does a VP in private equity make? ›

Salary Ranges for Vice President, Private Equities

The salaries of Vice President, Private Equities in the US range from $200,000 to $400,000 , with a median salary of $349,000 . The middle 67% of Vice President, Private Equities makes $349,000, with the top 67% making $400,000.

How much does a PE partner make? ›

At the low end, such as at a brand-new fund with a few hundred million under management, a Partner might earn in the $500K to $1 million range for base salary + year-end bonus. As fund sizes approach several billion under management, Partners move closer to an average of $1-2 million in base salary + bonus.

Is a career in private equity worth it? ›

A career in private equity can be highly rewarding, both financially and personally. Private equity managers often take a great deal of satisfaction from successfully guiding their portfolio companies to new high levels of profitability.

What are 5 unique questions you can ask at the end of an interview? ›

20 smart questions to ask at the end of your next job interview
  • What do you personally like most about working for this organisation? ...
  • How would you describe your organisation's culture? ...
  • Can you tell me about the kind of supervision you provide? ...
  • What have past employees done to succeed in this position?

Who earns more VC or PE? ›

PEs obviously pay much higher since the funds that they manage are bigger and the management fees higher. The three components of salary—base salary, bonus, and carried interest—are higher in PEs than in VCs.

Who makes more money VC or PE? ›

In general, you'll earn significantly more across all three in private equity – though it also depends on the fund size. For example, in the U.S., first-year Associates in private equity might earn between $200K and $300K total. But VC firms might pay 30-50% less at that level (based on various compensation surveys).

What are GPS and LPs in private equity? ›

A private equity firm is called a general partner (GP) and its investors that commit capital are called limited partners (LPs). Limited partners generally consist of pension funds, institutional accounts and wealthy individuals.

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