Today, private equity has become a predominant catalyst in the success of various companies as it deals with one of the most important factors of business, that is, capital. A business requires funding at each and every step to carry out all its activities, so by aiding this need, private equity has become extremely popular for financing huge organizations over the past decade.
The role of a private equity firm is not limited to just funding a company as it also participates in activities such as mentorship, advisory services, and stake holdings. They are basically like growth partners that are farsighted and attain a high degree of expertise. Private equity firms entice many financial professionals to obtain private equity certificates and trainings to be a part of them.
There are various intriguing roles in private equity that has the capacity to attract individuals to begin their career in this particular field that comprises of:
Fundraising: This is largely related to credit analysis. The activity is mostly done by senior members of the firm which includes preparing presentations in relation to the fund’s performance.
To identify potential investments: This role is played by associates who are responsible for identifying major investment opportunities which involves constructing financial models and explaining the seniors as to why the company should take interest in an investment avenue and also evaluate returns on it.
To manage portfolio companies: After making an investment, the PE fund provides services as well as keep track on the performance of the companies.
Developing exit strategy: Associates and senior managers use their analytical skills and valuable knowledge of financial modelling to find a buyer and construct a beneficial exit strategy.
If you aspire to join a top private equity firm, there are some specific skills that you would be required to focus on.
- Knowledge of several different sectors: As PE funds invest in a vast number of sector, any individual working for PE firms should have a clear-cut knowledge of industry parameters, strategic positioning, business model and a lot many things for determining investment avenues that have potential.
- An excellent ability to research: One requires research abilities for choosing the right investment prospect, analyzing strategies relating to the fund and the returns generated.
- To inhibit exceptional modelling and data analytical skill: As a large portion of the job of an associate involves modelling, it becomes necessary to have a decent understanding of different kinds of financing models, VBA & excel.
- Good Networking skills: It is essential for an associate to possess negotiating and networking skills as they are required to find deals, approach portfolio companies and do other important tasks that need them to have superb communication skills
- Attain knowledge of database tools and preparing reports: To carry out crucial tasks, private equity professionals are expected to use database tools such as Bloomberg, Thomson Reuters, and Factiva. Also, they are meant to present their finding with the help of informative reports.
These days many companies in the private equity industry are looking for perceptive and resourceful junior and mid-level professionals for executive roles. A recent report by Economic Times stated that Barings Private Equity Asia, Advent International, and Blackstone have hired undergraduates and graduates from the finest institutes for similar roles.