Building a Career in Private Equity

Team size

PE funds are very lean and typically have 4-10 members in India. Consequently, the opportunities are limited and competition fierce. Unlike some other industries, investment team members stay on for very long and generally aim to spend significant part of their careers in the same fund. The funds are also structured to incentivise longer tenures and consequently churn is also limited making it one of the hardest industries to break into. Compensation levels for the industry tend to be higher than most others over a long-term horizon given lean teams managing large pools of money.

Role and Career Progression

PE funds are generally flat in structure with focus on performance and results over designation and tenure. Teams typically have 4-5 designations depending on size and structure of the fund. Junior team members comprise Analysts/ Associates and Senior Associates; Mid-level team members comprise Vice Presidents / Principals and senior team members include MDs / Senior MDs.

• The junior team is generally responsible for laying out the groundwork for the deal and executing on multiple work streams relating to the business plan and investment memos.
• Mid-level members are responsible for driving execution, directing the junior members, and taking responsibility for deliverables. They lead management meetings and deal negotiations and keep the senior team up to date on deal progression.
• Senior members are responsible for deal sourcing, managing relationships, representing the fund on investee boards, presenting to Investment Committee and driving fund strategy.

Type of Roles

Pre-MBA roles

These are two to three-year roles designed to recruit junior resources before they head to business school. This structure allows the funds to have more hands-on deck without longer term commitments while allowing the fund to scout for exceptional talent. Candidates benefit by getting experience in the industry and can decide whether they want to pursue PE as a long-term career option. Depending on the performance of the members, fund structure and size, the fund may extend return offers selectively and in some exceptional cases even promote individual to a track role without asking them to go to business school.

In India, most PE funds have a Pre-MBA program. Candidates typically have 2-3 years of prior work experience either in investment banking or with top consulting firms. Candidates are designated as Analyst / Associate depending on the structure of the firm.

Track roles

These are roles where the candidates are expected to grow in the firm to an MD position. Candidates typically join as Senior Associate after a global MBA and work their way to be a VP, Principal and eventually MD.

In India, recruitment for track roles is typically from two talent pools –