Private Equity Career Path: Roles, Salaries & Progression - 300Hours (2024)

A career in private equity (PE) is one of the most interesting opportunities for those who already possess a passion for finance and who enjoy growing and building up a business in the long-term. Not only is this an extremely dynamic position, it can also be extremely rewarding both in terms of compensation as well as job satisfaction, which is perhaps why private equity is attractive to so many professionals.

So, what does a private equity specialist do? How can you progress through the ranks over time and what perks can you expect? In this article, we will take a deep dive into what you can expect from a private equity career path.


  1. What does someone working in private equity do?
  2. Why work in private equity?
  3. Private equity career progression and hierarchy
  4. Salaries in private equity
  5. How to start a career in private equity
  6. What professional qualifications are needed to work in private equity?
  7. Private equity career outlook
  8. Private equity exit options and opportunities
  9. Is private equity a good career path for you?
Private Equity Career Path: Roles, Salaries & Progression - 300Hours (1)

What does someone working in private equity do?

Private equity (PE) is a type of alternative investments whereby PE firms aim to create value in businesses by investing directly in private companies, or buying out publicly listed companies to delist them from the public market.

PE firm tend to take a longer view in investment horizon, aiming to create value in private businesses through operational improvements, financing growth and other changes. Through financial leverage, active management and longer time horizons, these should drive returns for PE firms. Private equity firms (General Partner) also make money by charging management and performance fees to their investors (Limited Partners).

One of the main responsibilities of a private equity firm (General Partner, GP) is to raise capital. This is normally accomplished by working with third-party investors (Limited Partners, LP). With the capital that is raised, a private equity firm will then typically buy another company in order to improve its performance, restructure or add value before selling at a profit.

Private equity firms therefore work to identify potentially lucrative opportunities, secure investments and manage companies to meet objectives. Once investment in a project is obtained, the private equity firm will retain a small percentage of the funds. The remainder is then devoted towards the venture in question (such as restructuring a company or asset before reselling it to enjoy an appreciable return-on-investment).

So, what daily tasks will a private equity specialist perform? One primary duty involves analyzing investment opportunities in order to decide if they should be recommended to a Limited Partner. This means that a significant portion of the day may be spent on tasks such as reviewing balance sheets, collating historical data, carrying out market research and valuation.

Communication and collaboration are also important parts of the job; particularly for those who have risen past entry-level positions. Additional responsibilities may include managing investments, post-investment monitoring, working with other team members, and presenting new opportunities to external investors.

There can often be multiple projects underway at any point, so it’s important that successful individuals in the industry are able to switch focus when needed. It’s also important to have the ability to assess each venture from various perspectives so that objective decisions can be made. This means being able to see things from the point of view of their firm and their investors, as well as the company they’re looking to invest in including its staff and customers.

Private equity is often involved in long-term ventures as opposed to one-off investment opportunities. This is why establishing transparent relationships with investors and other stakeholders is another important part of a career in private equity.

Private Equity Career Path: Roles, Salaries & Progression - 300Hours (2)

Why work in private equity?

Private equity is a popular sector, and a common target exit option for investment bankers. One important driving factor involves highly competitive compensation packages, typically with relatively better work life balance than investment banking. That said, working 80 hours a week is not unusual during busy seasons or if you’re in the top PE firms.

The private equity sector has seen significant growth in recent years which has led to a strong employment outlook, as firms are always seeking to hire qualified and talented professionals. There several other reasons why private equity is considered to represent an attractive opportunity including:

  • The ability to transform the financial outlook of an entire company.
  • A stimulating work environment.
  • Excellent collaborative opportunities.
  • The potential to change career paths when desired (more on this a bit later).

While there are a number of great reasons why you might want to pursue a career in private equity, these very same factors require a special type of individual. The majority of those who are successful within the private equity sector are passionate about finance, highly driven to succeed and possess the ability to “think outside of the box” when evaluating new investment opportunities. Individuals should also be somewhat patient, as rising through the ranks can represent a challenging process.

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Private equity career progression and hierarchy

The fluid nature of this role means that the exact career path and opportunities for progression will usually vary between firms (and depending upon the requirements of each). However, there are a number of typical milestones in the industry. Let’s examine each stage and what responsibilities will be expected.


PE analyst typically have 2-4 working experience, recruited from other firms like investment banks, accounting, consulting firms etc, depending on specialization.

Entry-level employees tend to perform a fair amount of “grunt” work such as crunching numbers, generating potential leads and data entry.

At this stage, the majority of junior analysts will focus upon specific portions of a deal as opposed to directly overseeing the entire process.


Private equity associates are slightly higher up in the food chain. Associates are often tasked with reviewing the work of junior analysts in order to check for potential errors. They will also communicate with other in-house teams (such as legal and accounting) in order to determine the viability of a specific venture.

Assuming that the investment is tentatively approved, associates may become involved with more complex modelling responsibilities. Once again, the exact duties will depend upon the size and speciality of the firm. Most associates are generally younger than 30 years of age, and they will typically remain in this position for an additional two to three years before looking to move up.

Senior Associate

Senior associates enjoy a more well-rounded role within the firm. They are responsible for various tasks such as developing new investment opportunities, communicating with third-party partners, performing financial valuations, and attending board meetings.

Senior associates will also work closely with partners and in many cases, they are rewarded with substantial commissions (assuming that a deal is approved). Once again, many individuals will remain at this position for between two and three years. Some may choose to remain within the firm while others could instead consider potential exit opportunities.

Vice President

Vice presidents are generally concerned with how the deals themselves are managed. They are the public face of the private equity firm. A private equity VP will develop working relationships with limited partners, and they may also travel frequently in order to secure new investments and meet with clients.

Vice presidents will also often act as mentors to associates and senior associates. Up to four years of experience may be required before a vice president is able to ascend yet further. Note that many firms will have more than one active vice president at any given time.

Principal Or Director

Assuming that a deal is identified and approved, private equity directors will often be directly involved with any subsequent client negotiations. This is one of the most powerful positions, as directors will often have an influence upon the investment strategy of the firm.

Individuals at this level will typically be heavily involved with the management of larger portfolios as well as ensuring a higher return-on-investment. As a senior role within the firm, some directors may remain at this position for the rest of their careers. However, others may wish to move on, with around four years the typical length of time needed before progressing to start up their own company.

Partner Or Managing Director (MD)

In the majority of cases, this is the most senior position that can be obtained at a private equity firm. Many managing partners and directors are also founders of the company itself. They are involved with nearly every operational aspect of the firm and while managing directors may not oversee entry-level employees, they will still be ultimately held accountable in the event that a mistake was made in the pipeline.

However, this level of administrative oversight is also rewarded with extremely generous salaries and compensation packages. Decades of experience are normally required, and most managing partners will remain at this position for the remainder of their career.

Private Equity Career Path: Roles, Salaries & Progression - 300Hours (4)

Salaries in private equity

The salaries associated with the positions outlined above will vary between organizations and yet, we can still draw some general conclusions based on recent industry statistics.

As with many careers in the financial sector, those working in private equity will typically receive a base salary and a performance related bonus on top. Another type of compensation that some private equity professionals receive is known as carried interest. This is a type of bonus that is paid once the company invested in is sold or floated, which is usually a few years after the initial deal was made.

Compensation can vary quite significantly between different locations, between firms of different sizes, and between the type of private equity fund that an individual or a firm is involved in managing. For example, some top performing mega funds will pay significantly more than smaller funds.

Some average salary ranges for private equity roles in the US and the UK are shown below.

Typical private equity salaries (US)

PositionTypical Time in RoleBase SalaryBonusTotal Compensation
Analyst2 – 3 Years$90k – $120k$10k – $30k$100k – $150k
Associate2 – 3 Years$100k – $150k$50k – $150k$150k – $300k
Senior Associate2 – 3 Years$150k – $200k$100k – $200k$250k – $400k
Vice President3 – 4 Years$200k – $350k$200k – $500k$400k – $850k
Director3 – 4 Years$250k – $400k$250k – $600k$500k – $1m
Partner / Managing Directorn/a$400k – $2m$400k – $2m+$800k – $4m+

Typical private equity salaries (UK)

PositionTypical Time in RoleBase SalaryBonusTotal Compensation
Analyst2 – 3 Years£60k – £90k£20k – £40k£80k – £120k
Associate2 – 3 Years£75k – £100k£75k – £100k£150k – £200k
Senior Associate2 – 3 Years£90k – £120k£90k – £200k£180k – £320k
Vice President3 – 4 Years£120k – £180k£100k – £200k£220k – £380k
Director3 – 4 Years£150k – £200k£200k – £600k£350k – £800k
Partner / Managing Directorn/a£200k – £500k£200k – £2m+£400k – £2.5m+

A major part of the compensation package for private equity professionals, particularly at Vice President level and up, is the “carry”, or carried interest. This is a share of the return on the investment that is paid to the firm following the sale of the company that was bought at the beginning of the project. These payments are usually calculated in proportion to the level of investment contributed by the individual. For top performing, large scale investments, the carry can represent millions of dollars or pounds for high earners.

Private Equity Career Path: Roles, Salaries & Progression - 300Hours (5)

How to start a career in private equity

If you’re curious about a career in private equity, then you might be wondering where to begin. A bachelor’s degree from a recognized university is a minimum, although some top-tier firms may prefer a master’s degree.

It’s also worth mentioning that some companies prefer to hire individuals who possess a fair amount of prior finance experience, either from investment banking, consulting, ‘Big 4’ accounting or analysts from working in the industry itself. Those who begin their careers as a graduate can often study to obtain an MBA while working on a full-time basis. Some firms will even provide training programmes which can expedite the learning process. There may be occasions when private equity internships are available, although this is a rare exception as opposed to the rule.

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What professional qualifications are needed to work in private equity?

The relatively complex nature of private equity signifies that a fair amount of training is required. While a university education is critical, these skills can often be complemented and enhanced with additional certifications.

Chartered Financial Analyst (CFA)

More than 170,000 professionals from around the world currently hold a CFA charter. Not only is this perhaps the most recognised financial qualification, but it illustrates that candidates take the world of finance seriously. Obtaining a CFA charteris associated with higher pay in the finance sectorand the program includes a range of topics that are relevant to a career in private equity.

Other benefits of becoming a CFA charterholder include the fact that itcosts less than an MBA, and that it is often preferred by larger equity firms which are extremely competitive in nature.


Many reputable equity firms will proactively search for prospective candidates by visiting the most well-known business schools. Possessing an MBA is therefore an excellent way to enjoy an edge over the masses.

As touched upon earlier, most mid- to upper-level private equity positions will require an MBA. This certification helps to cover the managerial aspects of an equity specialist and it teaches a host of powerful techniques to properly supervise subordinates.

ESG certifications

An ESG (environmental, social and governance) certification is becoming increasingly important within the world of private equity. Not only is this level of transparency often preferred by clients, but it helps to ensure that the PE firm remains in compliance with modern regulations.

It is therefore no surprise that ESG qualifications are increasingly popular, as firmsincreasingly look to recruit ESG specialists. As companies continue to place a greater importance upon sustainable investment practices, and subsequently this becomes more important within the world of private equity, a qualification such as theCFA Institute’s ESG Investing certificate or Certified ESG Analyst (CESGA)are likely become even more desirable.


A CAIA (Chartered Alternative Investment Analyst) certification is yet another title to consider. This is one of the few alternative investment specialization to go for in finance. For CFA charterholders, there’s even an option to leverage on the CAIA stackable program to get a CAIA Level 1 exemption.

Delving deep into alternative investments is highly relevant to a private equity career and can further indicate your interest and expertise in this field.Obtaining CAIA certificationalso provides members with access to global chapters; enabling individuals to tap into a much broader client base.

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Private equity career outlook

There has been some impressivegrowth in the private equity sectorover recent years, and the industry is expected to remain buoyant over the coming decade. Starting a career in private equity therefore should provide good opportunities for the right individuals.

Similar to many finance sectors, one pronounced trend involves the use of digital technology to access the global marketplace and to remove previous geographic barriers. Private equity has also been the key reason why the numbers of mergers and acquisitions have risen substantially in recent times. Some other key points regarding theoutlook for private equityinclude:

  • The demand for ESG-oriented investment opportunities has continued to rise.
  • High-yield debt markets continue to represent a borrower-friendly environment.
  • Private equity fundraising should continue to remain strong throughout 2022.
  • The number of technology-related deals is predicted to increase well into the foreseeable future.

Simply stated, the growth of this sector should provide those who possess the appropriate qualifications, skills and experience with a host of unique opportunities.

Private Equity Career Path: Roles, Salaries & Progression - 300Hours (8)

Private equity exit options and opportunities

Despite the attractive compensation package and interesting job scope, there are still a handful of exit opportunities to explore if private equity doesn’t suit.

Those who wish to broaden their horizons or simply desire a change of pace will often migrate to similar sectors such as hedge funds or portfolio management.Additional exit options include:

  • Being hired as a chief analyst by another firm
  • Starting a new private equity organisation
  • Becoming a venture capitalist
  • Private consulting
  • Hedge fund and asset management

The possibilities will also depend upon the unique interests of the professional, so there is a great deal of flexibility for those who wish tochange their financial career paths.

As many private equity firms specialize in certain sectors or asset classes, the experience gained can help with moving into another role in that sector. Private equity professionals also sometimes move into areas like hedge funds or corporate development, where their skills can bring some added value to the table.

Private Equity Career Path: Roles, Salaries & Progression - 300Hours (9)

Is private equity a good career path for you?

Embracing a role within the private equity sector will provide you with an incredible opportunity for professional growth. Due to the dynamic nature of this sector, it could also be an excellent choice for those who enjoy challenges in business turnarounds and restructurings.

Private equity specialists are well compensated, and it is often possible to climb the corporate ladder rather quickly if you possess the motivation. However, there are still some aspects that it’s important to be aware of, including:

  • This can be a high-stress position
  • Long working hours, especially at a junior level
  • Tough competition for jobs
  • Clients can be highly demanding

Is a career in private equity the right choice for you? If you’re looking for a dynamic and potentially highly rewarding sector that involves a range of aspects from identifying opportunities, financial valuation and executing deals together, through to getting involved with the operational aspects of businesses and even creating jobs, then private equity is certainly worth considering. For those with a passion for finance, who enjoy a challenge, and have a keen eye for an opportunity, this sector could indeed represent a sustainable finance career path.

We hope the guide above shed some light on a private equity career. Do you thinkthis career path suits you? Let us know in the comments below!

Meanwhile, here are related articles which you may find interesting:

  • CFA Careers: What Are Typical Job Opportunities for CFA Charterholders?
  • Why is ESG Important and Which Careers Can Benefit From It?
  • Finance Career Change: Plan Your Finance Career Switch With Our Free Tool
  • Epic Career Path Guides:Accounting|Investment Banking|Corporate Finance | Portfolio Management | Financial Planning | Equity / Credit Research | Wealth Management | Risk Management | Hedge Funds
Private Equity Career Path: Roles, Salaries & Progression - 300Hours (2024)


What are top salaries in private equity? ›

Private Equity Managing Director Salary + Bonus: Compensation here is highly variable, but a reasonable range is $700K to $2 million, with slightly less than half from the base salary. “Senior Partners” will earn more if the firm makes the distinction.

Is private equity a prestigious career? ›

Working at a Private Equity Firm

The private equity business attracts some of the best in corporate America, including top performers from Fortune 500 companies and elite management consulting firms.

Which private equity firm pays the most? ›

Apollo Global Management: Apollo Global Management is frequently reputed to be the highest-paying firm on the street in terms of all-in compensation, paying their Associates upwards of $450k per year.

Does private equity pay better than consulting? ›

PRIVATE EQUITY WINS. Compensation. The package is often designed to attract investment bankers, who are better paid than strategy consultants. As a consequence, you should expect a significant increase in your total compensation package, up to 100% in some cases.

What is the average salary of a CEO private equity? ›

How much does a Private Equity Ceo make? As of Apr 16, 2024, the average annual pay for a Private Equity Ceo in the United States is $82,146 a year. Just in case you need a simple salary calculator, that works out to be approximately $39.49 an hour. This is the equivalent of $1,579/week or $6,845/month.

What is the 2 20 rule in private equity? ›

The 2 and 20 is a hedge fund compensation structure consisting of a management fee and a performance fee. 2% represents a management fee which is applied to the total assets under management. A 20% performance fee is charged on the profits that the hedge fund generates, beyond a specified minimum threshold.

What is the rule of 72 in private equity? ›

The Rule of 72 is a convenient method to estimate the approximate time for invested capital to double in value. By merely taking the number 72 and dividing it by the rate of return (or interest rate) expected to be earned, the output is the approximate number of years for an investment to double.

What is the rule of 20 in private equity? ›

Many private equity firms charge a two-and-twenty fee structure. Fund investors must therefore pay 2% per year of assets under management (AUM) plus 20% of returns generated above a certain threshold known as the hurdle rate.

Can you make a lot of money in private equity? ›

Sign up here. Heidrick & Struggle's data suggests that at the top end, a managing partner in a private equity firm with at least $1bn in Assets Under Management (AUM), can expect to earn at least $3.5m in salaries and bonuses, plus around $35m in carried interest over a fund's lifecycle (typically around five years).

Is it hard to get into private equity? ›

Landing a career in private equity is very difficult because there are few jobs on the market in this profession and so it can be very competitive. Coming into private equity with no experience is impossible, so finding an internship or having previous experience in a related field is highly recommended.

Is it harder to get into private equity? ›

Yes! Private equity is one of the most competitive jobs to get – period. Not just in finance, but across the board. Private equity firms have very specific requirements for their hire candidates, both for entry-level analyst positions and for higher-level job openings.

Why private equity is the best career? ›

Private equity investors work with portfolio companies over the long-run, often 5-8 years. Hedge funds investments can be as short as a few weeks. So private equity teaches you the art of long-term view. Private equity also gives you the ability to work closely with the company over an extended period of time.

What master's is best for private equity? ›

There are also Master's degrees in other areas, like Economics or Management, but you're best off with Finance or the Finance track if you want the types of roles featured on this site (investment banking, private equity, corporate development, etc.).

Is private equity harder than banking? ›

Both investment banking and private equity are demanding careers that require long working hours, although private equity firms tend to have a more relaxed work environment and offer a more flexible schedule.

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