How To Get Into Private Equity: Requirements, Careers & Salaries

If you're trying to figure out how to get into private equity, you're not alone; it's one of the most competitive fields in finance. Private equity professionals work on high-stakes deals that involve buying, improving, and selling companies for profit. The roles are demanding, but they also offer some of the highest salaries in the industry. Whether you're a recent graduate or a mid-career professional, breaking in requires the right combination of education, experience, and networking.

In this article, you'll learn what private equity is, what professionals in the field do, and the typical career path. You'll also find step-by-step guidance on how to get started, including how to enter private equity with no experience.

What Is Private Equity?

Private equity refers to investment in private companies, which are those not listed on public stock exchanges. Investors, often through private equity firms or funds, provide capital to businesses in exchange for ownership stakes.

These investments typically aim to improve company performance and increase value before selling the company or taking it public. Private equity can involve buying out entire companies, investing in startups, or funding business expansions. The goal is long-term capital growth, often over several years, rather than quick returns.

Private equity is commonly used by institutional investors such as pension funds, endowments, and high-net-worth individuals who are comfortable with higher risks in exchange for potentially higher rewards.

What Do Private Equity Professionals Do?

Private equity professionals manage the entire investment process, from identifying promising companies to improving and eventually exiting those investments. They analyze financial statements, assess market potential, and negotiate deals to acquire companies. Once a deal is made, they often work closely with management teams to improve operations, reduce costs, and drive growth.

Their responsibilities also include monitoring company performance, preparing exit strategies such as mergers or IPOs, and generating strong returns for investors. These roles require strong analytical skills, financial modeling expertise, and an understanding of business strategy. Many private equity professionals have backgrounds in investment banking, management consulting, or corporate finance.

Is Private Equity Hard To Get Into?

Yes, private equity is considered one of the most competitive fields in finance. Firms tend to hire candidates with strong academic backgrounds, previous experience in investment banking or consulting, and advanced technical skills. Entry-level roles are limited and often filled through recruiting pipelines from top firms or universities. Candidates typically need to show not just financial expertise but also strategic thinking, deal experience, and a strong understanding of business operations.

How To Get Into Private Equity

If you're wondering how to get into private equity with no experience, the path can be challenging but not impossible. You'll need to build relevant skills, gain exposure to finance or business strategy roles, and make connections in the industry.

Step 1: Earn a Bachelor's Degree in a Relevant Field

To start a career in private equity, most professionals begin by earning a bachelor's degree in finance, economics, accounting, or a related business field. A strong academic record, especially from a well-known school, can significantly boost your chances of being noticed by recruiters.

Courses in corporate finance, statistics, and investments help build your foundation. Joining finance clubs, completing internships, or participating in case competitions can also make you a more attractive candidate.

Step 2: Gain Finance or Consulting Experience

Private equity firms rarely hire straight from college unless you're entering through an internship pipeline. Most professionals start in investment banking, corporate development, or management consulting, where they gain experience in mergers and acquisitions, financial analysis, and strategy.

These roles teach you how deals are structured and evaluated. Even roles in accounting or operations at a major firm can provide useful skills if you're looking to transition into private equity later on.

Step 3: Build Technical Skills in Financial Modeling and Valuation

Private equity roles require deep technical knowledge, especially in Excel-based financial modeling, company valuation, and leveraged buyouts (LBOs). Many candidates develop these skills through banking or consulting jobs, but you can also study on your own using online courses or finance bootcamps.

Understanding how to evaluate a company's cash flows, growth potential, and capital structure is essential. Practicing LBO models and reviewing real case studies can help you stand out in interviews.

Step 4: Consider a Top MBA or CFA Certification

If you lack direct experience, a top MBA program can help you pivot into private equity by connecting you with alumni networks and recruiting opportunities. Many firms recruit from elite business schools for associate or post-MBA roles.

Alternatively, the Certified Financial Analyst (CFA) credential demonstrates advanced knowledge of investment analysis and financial ethics. Both options show commitment to the field, though MBAs tend to offer better access to private equity firms and higher-level job openings.

Step 5: Network With Industry Professionals and Recruiters

Because many private equity jobs aren't publicly posted, networking is critical. Start by connecting with alumni, attending industry events, or engaging with recruiters who specialize in finance.

Reach out for informational interviews to learn about their career paths and ask for advice. A strong referral can help you bypass competitive job portals. Building relationships with people in the industry shows initiative and helps you stay on their radar when opportunities open up.

Step 6: Prepare for the Recruiting Process and Case Interviews

Private equity interviews are known for being rigorous. You'll need to demonstrate technical proficiency, analytical thinking, and understanding of business strategy. Interviewers often test your ability to evaluate investment opportunities, build LBO models, and discuss industry trends. You may also be asked to walk through previous deals or present investment ideas.

Best Degrees for a Private Equity Career

Private equity firms look for candidates with strong analytical, financial, and strategic thinking skills. While there's no single required degree, certain majors are more common among successful applicants. These degrees can help you develop the technical knowledge and business insight needed to evaluate companies, structure deals, and support investment growth.

Bachelor's in Finance, Economics, or Accounting

These degrees are the most direct pathways into private equity. A bachelor's in finance teaches you how to manage capital, analyze financial statements, and understand investment risk. Economics sharpens your ability to think strategically about markets and business trends. Accounting provides a detailed understanding of company operations and financial controls.

Many students in these fields explore accelerated finance degree programs to start their careers sooner or transition from related roles.

Bachelor's in Business Administration

A Bachelor of Business Administration (BBA) covers multiple areas important to private equity, including marketing, operations, finance, and management. This broad approach prepares you to understand how businesses work and how value is created across departments.

Students often pair their BBA with internships in finance or corporate strategy to gain experience. Graduates of these programs may enter consulting or banking roles before transitioning to private equity.

STEM Degrees With Quantitative Focus

Degrees in engineering, computer science, or applied mathematics can also be strong foundation, especially for technical private equity roles or firms focused on sectors like biotech or software. These programs develop your problem-solving skills and comfort with data-driven decision-making.

If you supplement a STEM degree with financial coursework, certifications, or business experience, it can position you well for roles that require deep analysis or industry-specific expertise.

MBA From a Top-Tier Business School

An MBA is often required for post-associate roles or for career changers entering private equity later. These programs help you develop advanced skills in financial modeling, strategy, and deal evaluation. They also offer access to alumni networks, recruiting pipelines, and internship opportunities that are hard to access otherwise.

Many professionals enroll in one of the top MBA programs online to keep working while earning their degree. Top schools with strong finance tracks are especially valued by private equity firms.

Private Equity Career Paths

Private equity firms follow a structured hierarchy, with roles that offer increasing responsibility in deal sourcing, execution, and portfolio management. While not all firms use the same titles, most follow a similar progression from analyst to partner. Advancement depends on performance, experience, and the size and structure of the firm.

Analyst

Analysts are typically recent graduates who join directly from undergraduate programs, though some firms only hire analysts through their summer internship pipelines. In this role, you'll assist with company valuations, financial modeling, industry research, and preparing pitch books or investment memos.

Analysts often support associates and senior team members on due diligence and market analysis. Most analyst programs last two to three years and are considered stepping stones to associate positions or roles in investment banking.

Associate

Associates, the most common entry point, are usually hired after two to three years in investment banking, consulting, or a related finance role. As an associate, you'll be responsible for evaluating potential investments, conducting due diligence, and building complex financial models, including leveraged buyouts (LBOs).

You may also interact with management teams and help monitor portfolio company performance. This role is highly analytical and typically lasts two to three years, though some firms offer paths to promotion or require an MBA for advancement.

Senior Associate

Senior associates are experienced professionals who have often completed an MBA or earned promotion from the associate level. They take on more leadership in deal execution, often managing junior staff and coordinating third-party advisors like legal or accounting firms.

Senior associates may also begin sourcing deals and building relationships with company executives. At this level, strong communication and project management skills are critical, as you're expected to handle more independent responsibilities while preparing for a vice president role.

Vice President

Vice presidents (VPs)oversee multiple deals and are key decision-makers in evaluating new opportunities. They manage associates and analysts, lead due diligence processes, and help negotiate transaction terms.

VPs also start playing a more active role in deal sourcing and maintaining relationships with investment banks, business owners, and co-investors. Many firms expect VPs to prove they can lead deals from origination through execution and exit before advancing to principal.

Principal

Principals are senior investment professionals who originate their own deals and oversee entire transactions from start to finish. They work closely with managing directors, lead negotiations, and often sit on the boards of portfolio companies to support strategy and growth.

Principals are responsible for mentoring junior team members and demonstrating leadership across both the deal team and firm-wide initiatives. This role is considered partner-track, and successful principals typically contribute meaningfully to the firm's fundraising and investment returns.

Managing Director or Partner

Managing directors or partners are the highest-ranking professionals in a private equity firm. They are responsible for setting firm strategy, raising new funds, and maintaining strong relationships with limited partners (LPs) and major stakeholders.

They make final decisions on investments, oversee the entire portfolio, and ensure that firm performance meets investor expectations. Reaching this level often requires more than a decade of experience, a proven track record of successful deals, and the ability to generate long-term value for the firm.

Private Equity Salary Expectations

Private equity professionals are among the highest earners in the finance sector, with total compensation often including base salary, annual bonuses, and long-term incentives like carried interest. Pay varies based on experience, firm size, performance, and location.

Entry-Level Analyst and Associate Salaries

According to the U.S. Bureau of Labor Statistics, analysts typically earn a base salary between $80,000 and $120,000 per year, with total compensation reaching up to $150,000 when bonuses are included. Associates, who usually enter private equity after investment banking or consulting, earn a base salary between $120,000 and $160,000.

Their total compensation with performance bonuses can reach $200,000 to $300,000 annually. Compensation may be higher at larger firms, especially in major financial hubs like New York or San Francisco.

Bonuses and Carried Interest

Bonuses can account for 25% to 100% of base salary, depending on individual performance, deal activity, and overall firm profitability. Junior employees typically receive year-end cash bonuses tied to their contributions, while senior staff may earn bonuses based on investment returns.

Carried interest, a share of profits from successful investments, is typically reserved for principals, partners, and managing directors. Although it may take years to vest, carried interest can result in multimillion-dollar payouts.

Earnings at Senior and Partner Levels

Vice presidents and principals often earn between $300,000 and $700,000 in total compensation, depending on firm size and performance. Managing directors and partners can earn well over $1 million per year, especially if they receive carried interest from multiple funds.

In top-performing firms, partners' earnings can exceed $10 million annually, driven largely by investment profits. These high earnings reflect the level of responsibility and the financial impact of their investment decisions.

Factors That Influence Pay

Several key factors affect how much you can earn in private equity. While base salaries are relatively consistent across firms, total compensation can vary widely depending on your role, performance, and where you work. Understanding these variables can help you evaluate job offers and set realistic expectations as you advance in your career.

• Firm Size: Larger firms typically offer higher base salaries, larger bonuses, and earlier access to carried interest, especially at the associate and principal levels.
• Location: Private equity professionals in cities like New York, Boston, and San Francisco tend to earn more due to higher living costs and more competitive job markets.
• Experience: Professionals with strong backgrounds in investment banking, consulting, or MBA programs from elite schools often enter at higher compensation levels and receive faster promotions.

FAQs About Getting Into Private Equity

If you're considering a career in private equity, you likely have questions about the path, requirements, and work environment. Here are answers to some of the most common questions people ask when trying to enter this competitive field.

Can You Get Into Private Equity Without Investment Banking Experience?

Yes, but it's uncommon. Most private equity associates are hired after two to three years in investment banking because that experience provides the deal exposure and modeling skills firms look for.

However, some professionals enter through management consulting, corporate development, or even directly from undergraduate programs at top schools. To improve your chances without a banking background, focus on gaining transaction experience, building strong technical skills, and networking aggressively.

Is an MBA Required To Work in Private Equity?

An MBA is not required for all roles but can be very helpful, especially if you're switching careers or aiming for mid- to senior-level positions. Many firms recruit post-MBA candidates directly from top business schools into associate or vice president roles.

If you're already in private equity or a related field, an MBA may not be necessary unless you're seeking advancement at a larger firm. For those without prior deal experience, an MBA can open important doors.

What's the Work-Life Balance Like in Private Equity?

Work-life balance in private equity varies by firm size and role, but it's generally demanding. Associates often work long hours, especially during active deal cycles, with 60- to 80-hour weeks being common.

Senior professionals may have more flexibility but still face high pressure from investors and portfolio responsibilities. Compared to investment banking, private equity hours can be slightly better, but the expectations remain intense due to the high stakes of deal performance.

What's the Difference Between Private Equity and Venture Capital?

Private equity typically involves investing in mature companies, often through buyouts or recapitalizations, with a focus on improving operations and generating returns through growth or restructuring. Venture capital, by contrast, focuses on early-stage startups with high growth potential and higher risk.

Private equity deals are usually larger, more structured, and involve debt financing, while venture capital relies on equity investments and staged funding. Both require strong financial skills but differ significantly in company stage and investment strategy.

How Competitive Is the Private Equity Job Market?

The private equity job market is extremely competitive. Most firms hire only a few new professionals each year, and they often recruit from a small pool of candidates with elite academic backgrounds and prior finance experience.

Even entry-level roles are difficult to obtain without internships or a strong referral. To compete, you'll need a standout resume, sharp technical skills, and strong networking connections within the industry.

Explore Business and Finance Degrees

To build the skills needed for a private equity career, consider a degree in business, finance, or economics with a focus on investments and financial analysis. Use Learn.org to compare programs, explore career paths, and find schools that offer practical experience through internships and industry connections.