Private Equity Associate & Analyst: The Gateway to Private Equity industry

Private Equity Associate & Private Equity Analyst Private Equity (PE) is one of the most prestigious jobs at Wall Street. Private Equity Associate and Analyst are the two most common entry points. Therefore, here we will deep dive into the job responsibility of those two positions, career path, salary and how to get into Private Equity via those two entry points. 1. Definition of Private Equity Private equity is an entity raising capital from outside investors, buying companies, and then selling them to make a return on investment. Private Equity firms work hard to operate and improve companies in the portfolio to increase the value of that organization before selling out. 1.1 How does a Private Equity firm Work?
Limited partners (LP) are institutional funds - such as pension funds, endowment funds, insurance companies, etc - and high net-worth individuals that committed capital to that VC. General Partner is the one who raises funds for the firm, decides when and which companies to invest in, and chooses when to exit the investment. Private Equity firm will operate everything to select investing targets, protect and grow the investment Investment portfolio is the list of companies or start-ups that the fund is putting capital into.
But how do they make money? PE often charges management fees of about 2% of the fund. This fee will be used to pay for operating activities in the firm. After an investment is liquidated, around 20% of the return will become carried interest. Most of them will go to the General Partners. The rest will be shared among Junior Partners, Principals/VP and Post- MBA associates.
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