Careers
Private equity is a broad, loosely used description of an industry in which firms focus on investing money into privately owned companies, and, at times, invest and hold ownership positions in publicly traded firms. Depending on the types of private investments PE firms are focused on, the dynamics and qualifications for pursuing a career in private equity can differ enormously. Below we have segmented the private equity industry into 3 somewhat simplified groups, and have highlighted the different skill sets considered most important for each career path. Please keep in mind, while no Tuck student would be expected to have mastered all these skills, the examples should serve as guidelines to use when spinning your own career experiences in a manner that best resonates with the PE firm interviewing you.
Private Equity Firms: Buy-Out
- These PE groups are typically involved in purchasing an entire company- or large ownership position in a larger company. Often debt is used to help
fund the purchase of an entire company along w/ some equity that the PE group
invests (LBO transaction).
- Given the frequent desire to use debt, these PE groups tend to focus
on more mature, cash-flow-steady companies that are larger in nature.
- Given the buy-out nature of these firms, they tend to staff greater
levels of junior and mid-level professionals than other private equity firms.
- These PE firms typically leverage junior professionals to model out
transactions, perform due diligence on transactions. Most PE firms hire
former investment bankers and similar corporate finance professionals
(accounting, commercial banking) since these professionals' backgrounds are
well suited for such positions.
- These firms also hire management consultants (from time to time) that
have good strategy skills, and have demonstrated the intelligence to quickly
pick up the finance and accounting skills that their background has lacked.
Although, many times management consultants are hired in more senior positions
at these firms.
Venture Capital Firms: Early Stage
- These VC groups focus on giving start-up companies their first and
second rounds of professionally invested growth capital/financing.
- They tend to focus on specific industries (software, hardware, telcom,
healthcare, etc.) since it's important to understand the dynamics and
potential of a new company addressing a newly emerging market.
- These VC groups tend to be small in nature, and the majority of their
staff is at the partner level- they don't hire many junior level professionals,
and even fewer mid-level professionals.
- These VC groups like to hire professionals with operations, management
and strategy experience in a given vertical industry upon which the VC group
is focusing. This is generally a different skill set than the skill set for
which buy-out type PE firms want.
- Post MBA, early-stage VC positions are more difficult to find than a
position at a PE firm, not that a PE firm position is easy in the first place!
- If you find a firm that does hire junior level staff, keep in mind
that they tend to hire folks on an "as-needed" basis, which is typically every
2-3 years and is not on an annual, routine basis like many investment banks
and management consulting firms.
Venture Capital Firms: Mid-to-Late Stage
- These VC groups focus on investing growth capital in later financing
rounds to smaller companies that are evolving past the "start-up" phase.
- These VC groups, like early stage investors, tend to focus on specific
industries software, hardware, telcom, healthcare, etc.) since it's important
to understand the dynamics and potential of a new company addressing a newly
emerging market.
- In many respects, these firms invest more like early stage VC firms,
but do tend to hire more junior and mid-level investment professionals.
- Please keep in mind, all of these statements above are generalities and there are
always exceptions. Please contact Bill Dering T'05 at william.g.dering@dartmouth.edu if you have any further questions or
would like to discuss a job search in the private equity industry.
The following note is used in the Private Equity Finance class and is an excellent resource for an overview of careers in private equity.
Read the Note on Private Equity Careers »
Other career links:
Tuckjobs.com»
A resource for Tuck students, alumni and recruiters.
Private Equity Search Digest»
The club has negotiated a special discount of $10/quarter on subscriptions to Private Equity Search Digest, a unique
online career resource for venture capital and private equity job seekers. The service offers extensive
resources aimed at improving job search efficiency and ensuring that serious candidates get a comprehensive
picture of available openings in the private equity marketplace. Tuck students can claim the discount by
contacting any club officer to obtain the promotional code for use during sign-up.
