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Pros and Cons of Working in a Private Equity Firm?



Pros and Cons of Working in a Private Equity Firm?

At times, private equity acts grimly as it enters the industry to take ownership of certain businesses. However, this may not seem to be the same situation at all times. Investing in something worth the effort is the best way to go, but this does not assure to reap the same benefits. If there are pros in private equity there would definitely be cons that the industry might need to be aware of.

Here are some reality checks, in case you’re planning on landing a career in private equity. Private equity is indeed a fascinating career with high paychecks and is highly competitive.

The Pros –

  • Strong employability rate

Job opportunities for financial analysts and private equity associate working for financial institutions or related firms are said to grow 37% during the year 2012 t0 2022. This report has been estimated by the U.S. Department of Labor, the rate of the job increase in a private equity firm is said to grow faster than any other occupations as a career.

  • Fat paychecks

Professionals even without an MBA degree are said to make around $264,464 annually. Now one can imagine if the candidate has all the recent skillset that industries are looking to hire for, the compensation could be higher than what is given on the records.

  • Opportunity to transform an organization

If you’re at a senior level, one may get the opportunity to make use of one’s expertise to improve the growth and development of the organization. Doing so might bring in more attraction for sales or an IPO.

  • Positive experience

Working at a generalist fund might give you the opportunity to learn about various industries, be it a pharmaceutical firm or an information technology firm or consumer goods or an air transportation industry. One can continue becoming a generalist throughout one’s career, else the professional can either developed a specialized skill set in a particular domain to increase the marketability with a specialty in hedge funds or investment banks.

The Cons –

  • Difficult to grab a career in the industry

If you’re not from any top tier universities or do not have related experience in an investment banking field, then breaking career in private equity can be a tough call. The most top firm requires candidates with an MBA degree from tier 1 universities.

  • Lack of diversity

It is studied and found that women generally hold a very low percentage in senior-level positions which is displeasing.

  • Limited job opportunities and advancement at small firms

Professionals sitting at higher positions aren’t moving anywhere, hence there are fewer chances as a private equity associate to climb the ladder of success or grow in the same organization.

  • Stressful work environment

With the workforce moving at breakneck speed it is likely that employees working at a private equity firm may burn out.

  • Negative view by the public

Most of the critics of private equity firms believe that this career choice for professionals might be bad on a longer run, which may further cause loss of jobs.

The debate can still go on, however, if one considers taking up a job in a private equity firm then doing brief research about the pros and cons is a quick way to solve your query. The tradeoffs are promising though.