Complete Beginner’s Guide to Private Equity Analyst

Private Equity can be broadly defined as investment in private, unlisted company by assuming higher risks and hoping for substantial returns. Becoming a private equity analyst is a dream for almost many of Finance professionals.

Do you think that getting a job as a private equity analyst is easy? the answer is a big NO!.

Private equity can be really interesting if you are someone who enjoys interacting with people, conducting research, doing due diligence and managing finance portfolios for people. What I aim to do through this article is to assist you in exploring about private equity as a profession and to give you a clear picture of what you would be as a private equity analyst.

If you wish to gain Private Equity Skills Professionally, then you may look at this Private Equity Course

If you want to know the differences between the following before you proceed –

Below are the questions that could come to your mind when you consider becoming a private equity analyst.

Let me answer each of these questions for you and you will find out for yourself all about being a private equity analyst.

What is Private Equity?

To help you understand this, answer my question- what is that the start-up companies and well established companies have in common? It’s simple, they both require investment/capital in order to grow. This growing could mean building more manufacturing plants, recruiting more people or rejuvenating the existing products. Such investments could also help in buying another company or save a company from closing down.

So, where does this investment come from? It could be a borrowing from some bank or selling shares and raising money from the stock exchange.

But sometimes companies look for something more than just the monies flowing in the company. They want investment from someone who could guide them in building their business. This role is played precisely by a private equity firm.

The private equity guys become a part of the company, usually at the board level and help foster growth, nurture the company to create additional value. For a new start-up it could be commercializing a great idea, for established firms it could be to helping the management improve their existing ideas or find companies with whom they could work joint handedly.

The private equity firms along with their own investment raise this money from banks, pension funds, endowments funds, savings account. As the company reaches its target growth, the investors sell their equity. The value which is created is shared among the people who provided the original investment.

Hence we can say that Private equity is not an advisor but investor who create or build better businesses.

One thing to keep in mind is that the private equity funds invest in assets that owned privately or that are publicly owned but the private equity buyer plans to take private.

Who is a Private Equity Analyst?

  • Private Equity Analyst or PE Analyst is a person who work primarily for the private equity firms and conducts research, ratio analysis and gives interpretations on private companies.
  • Use due diligence, financial modeling techniques and valuation methods in order to assess the advantages of investing in a private company.
  • Manage an investment portfolio or fund, which comprises partial or whole interest in the equity of the private companies in which they invest.
  • Raise money from private companies, banks, and high net worth individuals to maximize returns beyond those that are offered by public stock exchanges.
  • Experts who forecast the return on an investment of a company and also define the best usage of certain investment.

What does a Private equity analyst do?

  • Accurate valuation: The companies that the private equity firms target is privately owned and hence the market price of their stock is not determined. Hence the role of an analyst becomes crucial in order to provide accurate valuation of the company’s shares where it wants to invest.
  • Fulfillment of investment objective: Another thing which a private equity analyst needs to determine is whether the investment in a particular company would meet the funds objective. For this the analyst needs to do thorough financial statement analysis and compute the correct present value of a company’s projected earnings.
  • Determine optimal capital structure: There are situation where the private equity forms would consider changing the capital structure of the company it invests in. Here the private equity analyst will have to work on the assumptions and prepare financial scenarios. With this he/she could determine the optimal mix of debt and equity in order to maximize the return on investment.

Other things which could be included in the job profile of a private equity analyst are;

  • Analyze new investment prospects
  • Raise funds from corporates
  • Conduct detailed financial analysis
  • Create financial models
  • Create corporate presentations
  • Write investment committee memorandums
  • Interact with the management
  • Manage and observe the portfolio investments
  • Provide backing to the structuring, due diligence, negotiation and financing of the investments
  • Provide periodic review reports of existing portfolio companies to the investors
  • Conduct research and gather relevant data of the industry and competitors

Additionally, the tasks of the private equity analyst will depend on the investment strategy that a private equity firm undertakes at a particular point of time.

What are Pre-requisites for a Private Equity career?

If you considering the entry level jobs in private equity, it would be that of an Analyst or Associate.

  • If you apply for private equity analyst jobs you would require a Bachelor´s or Master´s Degree in Finance, Economics, Investment Analysis, or Accounting.
  • A Masters in Business Administration (MBA) specialized in finance, Chartered Financial Analyst (CFA) would always be plus
  • The work would be detailed and demanding hence one might have to work for long hours so ensure your lifestyle suits such kind of a job
  • It would involve lot of interactions with firms, bankers, consultants in order to get your project rolling hence you need to be good in communication skills and networking.
  • The transactions are concentrated mainly on debt. So you need to sufficient knowledge of the terms and concepts particularly good understanding of syndicated bank loans and high yield bond that are generally used in buy outs.
  • In countries like UK and USA, someone with a Bachelors’ degree can get a break into the equity sector.
  • As a beginner or fresher, experience can be dodged if the candidate shows good skills.

What skills must a Private equity analyst possess?

  1. Strong Industry knowledge: If you planning to take up the private equity career you need to possess strong knowledge of various industries and their business models, industry structure, its working etc. This skill will enable you to work efficiently and keep your work up-to-date in this fast-paced environment. Especially if you want to make it to the top it is important to develop excellent investment and business judgement which could happen only if you are good in conducting research on the industries/portfolios you work upon.
  2. Analytical skills: As we already saw the core work that a private analyst does is of analyzing and interpreting the financial statements, prepare financial models, contemplate on various financial and economic scenarios. This kind of work would be required to provide financial insights into how a particular company stands financially, comparing it with the market conditions caring out detailed research analysis. An analyst is expected to be good at multi-tasking, logical and analytical reasoning to come up with creative solutions to problems.
  3. People skills: As a PE analyst you will have to interact with a lot of business insiders and a lot of outsiders to make contacts which is very critical to your success. It involves interacting with the senior members of private equity firms to acquire intelligence on existing and potential investments and internally get the work done with your team mates. You should be capable of creating positive and productive relationships for the business. In all it would require good spoken and written communication, leadership skills, to get the work done.
  4. Valuation skills: The most fundamental skill that you would require would be valuing companies with different approaches. Companies in different sectors are valued differently. Hence you will need to learn the core valuation concepts, its application and methods successfully.
  5. Allied skills: Other important points which need to be kept in mind are that since you would be expected to work for long hours most part of the week you should be someone with high energy level. You should be able to seamlessly use the Microsoft suite (Excel, MS Word and PowerPoint). Inessential you need to be a self-motivated professional who is practical, high on ethics and result oriented.

What would be the typical working day of a private equity analyst?

When it comes to the number of working hours it is not as bad as compared to investment banking. The day for an PE analyst would start around 9.00 am and end around 7.00 to 9.00 pm depending upon the work. You might have to work on weekends subject to work related on some urgent deal. The below infograph would describe the typical tasks that an PE Associate or an analyst would do throughout the day.

Day of a Private Equity Analyst

The work culture at PE forms either could be a casual work environment or even like traditional corporates where you work in cubicals. In addition, since major part of their reimbursement is dependent on how well the investments do there exists a culture of performance.

What would be the job and salary prospects for a Private equity analyst?

Job Prospects

  • Look for internships: If you have decided to make a career in private equity while you’re still studying it would be great if you start early in this field and go for internships. This will enable you to have a hand-on experience of how the working environment is, you will be able to decide if you fit in there. If everything goes well and you are able to impress your employers, you can surely look forward for a fulltime placement there.
  • Take up campus placement opportunities: Many avoid going for campus placements considering the salary figure companies offer to fresher’s. But there are top and mid-level equity firms that usually hire people from campuses’ and hence you need to keep a watch on the opportunities coming your way and seize them.

If you are experienced in investment banking, trading, consulting for a year or two in specific industry, it is going to be considered by the recruiters.

One thing which needs to be kept in mind is while you prepare yourself for the interviews, do not prepare resumes which are found very common. You need to match the skills and expertise you possess with what the company requires. Believe me the generic kind of resumes would directly got in the trash.

Salary prospects

Coming to the important part- The Salary! This is going to be subjective and will take into consideration your skills, education and experience..

Private Equity Salary

source: Indeed

  • Your compensation as an PE Analyst includes base salary and bonus. Like other related fields, the bonus will be based on your and the fund’s performance, wherein higher weightage is given to funds’ performance.
  • If we compare the compensation, it is marginally higher by 5% if you are an MBA as compared to not having an MBA.
  • In New York, an average Private Equity analyst would earn 40,000 – $1,00,000 a year and in London its GBP 23,000–58,000.

# The leading private equity firms throughout the globe include Goldman Sachs Capital Partners, Kohlberg Kravis Roberts (KKR), The Blackstone Group, Apollo Management and Bain Capital.

Private equity Career Progression

The below table will define the Past (background), Present (Responsibilities), Career progress (Future) in Private equity.

Private Equity Background Responsibilities Career progress
  • Prior private equity experience not required
  • Could ask for more than 1 year of experience in investment banking
  • A Pre-MBA candidate
  • Support to team members
  • Financial modeling and analysis
  • Market research
  • Post investment monitoring
Two years as an analyst before promotion to the position of an associate
  • 2-4 years of relevant experience in a PE firm
  • OR investment bank
  • OR worked in PE environment or similar transactions
  • Review applications
  • Support the team members in negotiation and execution
  • Build a contact network
Three years as an associate before promotion to the position of an Associate director
Associate Director
  • 3-6 years private equity investment experience
  • Begin to source and lead mid-market transactions
  • Play a significant role on larger transactions.
Two to three years in this role before promotion to Investment director
Investment Director
  • Minimum five to six years private equity experience.
  • Running deal teams
  • Responsible for execution process
  • Decision-making responsibility
  • Main points of contact externally
Minimum of  two to three years to promotion to Director
  • Highly experienced private equity professional
  • Origination of deals
  • Post investment role
  • Make Strategic decisions
  • Key role in fund raising
Management succession in the firm offering opportunities Heading international expansion within or outside of the firm


One great thing about challenging jobs like being a private equity analyst is that it provides you with invaluable experience. But it would be difficult for anyone to judge if this would be the correct career option for you. That decision would completely be yours and would depend upon your interests and skills. Hope the information I shared through this post proves useful and helps you to decide your future in this interesting field. All the very best! :-)

What next?

If you learned something new or enjoyed the post, please leave a comment below. Let me know what you think. Many thanks and take care. Happy Learning!


  1. By Chirag on

    Great article – I am on the verge of finishing my MBA from Kellogg. Will appreciate if you can provide any guidance on switching careers into the PE Industry – My background has been engineering and have worked for 10 years in the field. My major is Finance for my MBA


    • By Dheeraj on

      Hey Chirag, many thanks. not sure if one can jump to PE industry directly. In most cases, students join an Investment Bank and then move to PE Industry. With your background, you should not find it too tough to enter in this Industry.

      All the very best,


  2. By Jit on

    Hello sir,

    Actually i am getting a job in Private equity research, but I am confused as I have worked in A/C & finance for more than 7 years. I just want to know the scope & challenges in Indian Scenario.

    Eagerly awaiting for your reply


    • By Dheeraj on

      Hi Jit,

      If private equity fascinates you, then you should join this job! It has great potential in the Indian Scenario.



  3. By Addison on

    Thank you for giving out such useful information on the PE industry. I have been religiously following your blog from recent times and I really enjoy reading your blog. It is indeed very informative!


  4. By Judy on

    Thanks a ton for this great article and information. I have done an internship at one of the investment Banks for three months and i wish to know if that would be helpful in getting placed at any of the PE firms?


    • By Dheeraj on

      Hi Judy,

      An internship in Investment banking should definitely help. All the best!



  5. By ARINJAY on

    This is very helpful in understanding. You have explained it in simple terms so that one can abstract.

    Thanks for sharing your knowledge !


  6. By nishant on


    I am a CA final student and i am very interested in investment banking. Can you guide me where i should start.


    • By Dheeraj on

      Hello Jadon,
      CFA can help you build credentials in the financial industry and will definitely be a plus when applying for Private Equity jobs.


  7. By Nehash on

    Thank you for such good blog posts. I enjoy reading them and is also giving me a good heads up on the various finance areas.


  8. By Samara Jones on

    The overall article is quite comprehensive, Thanks. I have a question that Is venture capital a form of private equity?​


  9. By Vivek Pandey on

    Hi Sir,

    Thanks for sharing this article. We get the clear and in depth knowledge about Private Equity.


  10. By AR on

    Thanks for the great article!

    From an Indian perspective, do you think it would be possible for a Chartered Accountant to break into PE with no prior experience? In case yes, should only mid market funds be targeted?


    • By Dheeraj on


      there is a possibility of a charted account to break into PE with no experience. I have seen some of my CA friends moving into the investment banking domain and later shifting to Private Equity.

      All the very best,


  11. By Misheck on

    I really needed the information contained in the article. Thanks man for the insightful stuff.

    Ngiyabonga (Ndebele for thank you)



  12. By Manish Kumar on

    Thanks…..for your valuable inputs. Its great feeling to get your article every time.



  13. By Manoj Jha on

    It feels good and helpful always whenever we get an article from your side due to its simplicity on complex issues. Easy to grasp a typical thing.
    CA Manoj


Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top ▴