What Kind of Background and Training is Needed to Work in Private Equity?January 24, 2019
Youngsters and fresh graduates with an MBA are passionate about getting PE-Private Equity or VC-venture capital jobs. That’s a good goal to start with. What you really need is to research what these firms do, what your job entails, why you want to make a career in this field, what you can do to achieve your goals and much more. Let us explore the kind of background and training you will need to work in PE.
What does a PE Firm do?
PE firms obtain their funds from HNIs with surplus cash and utilize it to acquire stakes of equity in companies that show promising returns. The main players in PE are institutions, accredited investors, and HNIs who invest large amounts of money over long lock-in periods in return for profit shares in the fund. Duration of a PE can be from 5-7 years. On completion, the PE firm will sell through an IPO its stakes to gain from huge profits.
A courses on financial analysis will help you understand who and where you will be working with and prepare you to perform in the chosen role. Again, research the proposition. Provided below are some details that can help you distill your thoughts.
Responsibilities of a PE analyst
• Manage and monitor investments under management.
• Finalise annual and quarterly returns, financial statements, fund-reviews, and portfolio companies.
• Update, create projection and valuation models
• Involve in the review, study, research of fresh investments, and due-diligence activities.
• Execute target investments research, plan and create collateral fundraising
• Transcribe, research, present industry studies with the aim of detecting future investments.
• Prepare detailed reports and memorandums of information
• Review deals and legal documentation
• Build performance metrics and portfolio analysis
• Interact with peers, senior members of other PE firms to get business intelligence on potential and existing investments
• Diligently complete allotted additional duties and stay updated through financial analysis courses online.
A graduation degree or even a Master’s in Finance goes a long way. Add certifications that are relevant like the CFA from the Chartered Financial Analyst Institute. Those from a non-financial background can do an MBA and take these courses, as most offer boot camps to bring you to speed. Analysts aspiring to work in securities should take their Series 63 and Series 7 exams to be ready for any suitable position.
Non-transferable skills will also need to be developed and aligned with the enterprise’s needs. You must have the following traits.
- Interpersonal Communication skills
- Ability to solve problems creatively.
- Collaborative team skills
- Ability to work with ambiguity, pressure, and demands from the startup environment.
- Discipline and integrity since you will be working on financial transactions.
ExperienceMost financial analysts gain employment as soon they finish their CFA certification or an MBA from a reputed university. However, you other than education and the skills above you will need luck. That’s all.
Ignore the payouts and work diligently. In a few years, you will be successful and climb the ladder of success. The payouts get more handsome as time moves on. And the scope is limited solely by you. The industry demands for good Financial Analysts have always been short of the supply and has and will never end.Skill sets:
A Financial analyst has to have a gamut of traits besides training which can be acquired through online refresher courses and extensive research. The importance of continued learning can never be stressed enough. Once you have your skills in place and your certification to validate you are industry ready, act on taking your skills to the next level.