What are careers in private equity?

• Building financial models

• Review Confidential Information Memorandums (CIMs) submitted by bankers who are selling companies

• Monitoring portfolio companies

• Conducting due diligence on potential investments

• Cold calling to source new deals

An associate role refers to candidates that are pre-MBA and have some experience in the industry, usually as an analyst. The associate's job is to lead deal processes from start to finish. Private equity firms raise capital from outside investors and use it to acquire and improve companies. They eventually sell those companies for a profit.

As an associate, you would be involved in all steps of the process including the raising capital, acquiring the companies, and making improvements. Your ultimate goal would be to sell the companies to earn a return. In addition to "deal work", associates will spend a great amount of time on non-deal work.

Non-deal work includes monitoring portfolio companies and supporting management teams. On a typical day an analyst will:

• Review CIMs and other marketing documents from bankers looking to sell companies

• Generate new deal ideas and reach out to companies to introduce themselves

• Review financial results from a portfolio company and make sure they are in line with the forecast

• Build a valuation or leveraged buyout model for a potential deal

• Analyze a potential bolt-on acquisition

• Conduct market research to assess a company's growth potential

A senior associate and an associate are nearly the same things. A senior associate position is typically given to an associate who has been at the firm for several years and has been promoted directly or an associate who worked for the firm went to business school and then returned to the firm.

The workload for an associate and a senior associate is not that different. But the senior associate position moves them close to the vice president (VP)-the level where they will have more managerial responsibilities. After reaching the senior associate level, it may take 2 to 3 more years to reach VP or leadership levels.

It is quite difficult to get promoted to VP or other leadership positions because they do not become available very often and due to the nature of the position, most companies prefer experienced candidates and tend to go with candidates from other firms.

To that end, many associates and senior associates at larger private equity firms will go downmarket to advance their careers. If you are fortunate enough to obtain a private equity VP position, you are essentially the "deal manager" for your firm. For VPS, soft skills are far more important.

VPS need to convince their senior team members that they know what they are doing and gain the trust of their senior staff to manage deals. VPS will also lead and mentor others on the team, work closely with the clients, and vet transactions. A VPS needs to be a good talker and presenter to be successful.