Guides / Career guides / Private equity
Private equity: from advising on deals to owning them.
Private equity firms buy companies, improve them and sell them. Most associates join after two years in investment banking, and recruiting moves fast once it starts.
Large-cap buyouts
The biggest funds, the biggest deals, and the most structured recruiting process.
Middle market and growth
Smaller companies, more hands-on work, and recruiting that is more flexible.
Banking analyst or PE associate?
| Compare | Investment banking analyst | Private equity associate |
|---|---|---|
| How you get in | Online applications to summer internships | Mostly after two years in banking, through specialist headhunters |
| How recruiting runs | Portals, tests and superdays over months | Each firm usually uses one headhunter; from first interview to offer can take 24–48 hours |
| What interviews test | Accounting, valuation and fit | A paper LBO, a timed modelling test, an investment case and your deal experience |
| Pay | About $110,000 base in New York | Average total pay about $246,000 (Glassdoor, February 2026) |
Figures from published guides and Glassdoor data; they vary by fund size and region.
A typical day in private equity.
A realistic junior day on a normal week. Live deals, results seasons and market shocks make it longer.
- 8:30
Check emails and portfolio company updates; read sector news.
- 9:30
Call with an investment bank about a company coming up for sale.
- 11:00
Work on the LBO model for a live deal: test the price, the debt and the returns.
- 14:00
Diligence calls with experts and management. Write up what you learned.
- 16:00
Draft sections of the investment committee memo.
- 19:00
Wrap up. Live deals mean late nights and weekends, but quieter weeks are calmer than banking.
The career ladder and pay.
| Level | Typical years | What you do | All-in pay |
|---|---|---|---|
| Analyst (some firms) | 0 to 2 years | Screens companies, builds models, supports associates | $150k to $250k |
| Associate | 2 to 5 years | Builds the models and memos, runs diligence work streams | $250k to $425k |
| Senior associate or vice president | 5 to 8 years | Leads deal execution and works with portfolio company management | $400k to $700k plus carry |
| Principal or director | 8 to 12 years | Sources deals, leads diligence, sits on portfolio company boards | $600k to $1.2m plus carry |
| Partner | 12+ years | Makes investment decisions and raises funds | $1m+ and significant carry |
Approximate all-in pay (base plus bonus) in US dollars at large firms in New York in recent years. London is usually 20 to 30% lower; smaller firms and other cities pay less. Bonuses swing with the market.
How recruiting works.
Most private equity associates come from two or three years in investment banking or consulting. In the US, the largest funds run “on-cycle” recruiting through headhunters very early, sometimes in an analyst’s first year. Smaller funds hire “off-cycle” throughout the year.
Some funds now hire graduates directly, especially growth equity firms and in Europe. Expect a modelling test (often a two- or three-hour LBO), a case study where you recommend whether to invest, and many interviews on deals you have worked on.
Who hires.
| Type | Examples | What it’s like |
|---|---|---|
| Mega-funds | Blackstone, KKR, Apollo, Carlyle, TPG, EQT, CVC | The biggest buyouts, structured associate programmes, the highest pay. |
| Upper middle market | Hellman & Friedman, Thoma Bravo, Advent, Permira, Cinven, Bain Capital | Large deals, often sector-focused, with smaller teams. |
| Middle market and lower middle market | Hundreds of firms across the US and Europe | Smaller companies, more hands-on work with management, broader roles. |
| Growth equity | General Atlantic, Insight Partners, Summit Partners, TA Associates | Minority stakes in fast-growing companies; less debt, more focus on growth. |
Firm names are examples, not a ranking or an endorsement.
Are you ready to apply?
Tick what you can honestly do today.
Your plan, step by step.
- Before banking
Pick a strong analyst seat
Groups that do lots of M&A and sponsor work give you the best preparation.
- First 6 months as an analyst
Master modelling
Practise LBO tests on weekends; headhunters may call sooner than you expect.
- When headhunters call
Meet them all
Be clear on the size and type of fund you want. Prepare your deal stories.
- Interviews
Think like an investor
For every company, ask: would I put my own money in at this price, and why?
Where it leads.
Staying in private equity
Many associates leave for an MBA, then return as senior associates or move to a different fund.
Portfolio company roles
Finance, strategy or operating roles at companies the fund owns.
Hedge funds and credit
Especially credit and event-driven funds.
Starting a fund or search fund
Some experienced professionals buy and run a company themselves.
Myths and reality.
“Private equity is just financial engineering.”
Debt matters, but most returns today come from growing revenue and improving operations.
“You can’t get into private equity without banking.”
Banking is the most common route, but consulting, Big Four transaction services and direct graduate programmes also lead in.
What to read.
- Private Equity at Work by Appelbaum and Batt. A critical, balanced look at how buyouts affect companies.
- The Masters of Private Equity and Venture Capital. Interviews with well-known investors.
- PitchBook and Private Equity International news. Follow deals and fundraising.
What they ask in private equity interviews.
Every process tests LBOs in some form. Try each before you open it.
Paper LBO Buy a company with EBITDA of 100 at 10x, using 60% debt. EBITDA grows to 150 in five years, you exit at 10x and debt falls to 300. What are the returns?
Entry value 1,000 with 400 of equity. Exit value 1,500, minus 300 of debt, gives 1,200 of equity. That is 3.0x your money, or roughly a 25% IRR over five years.
LBO What makes a good LBO candidate?
Stable, predictable cash flow to pay down debt, a strong market position, room to improve margins, low capital spending needs, and a realistic way to sell it later.
LBO What are the main ways a PE firm increases returns?
Grow EBITDA, pay down debt with cash flow, and exit at a higher multiple than you paid. Using more debt also raises returns, but adds risk.
Returns What is the difference between IRR and multiple of money?
Multiple of money is how many times your equity you get back. IRR adds time: 2x in two years is a much higher IRR than 2x in six years.
Deal experience Walk me through a deal on your CV.
Cover the company, the buyer and the rationale, your role, the valuation, and whether you would have invested yourself. Interviewers check you understood the deal, not just the slides.
Fit Why private equity rather than staying in banking?
Focus on wanting to make investment decisions and own the outcome, and on long-term work with companies, not just the pay.
Test yourself: private equity
Questions from the Mandate app. Try each before you open it.
In a private equity fund, who are the limited partners (LPs)?
The investors, such as pension funds and endowments. The PE firm is the general partner (GP) that manages the fund.
“2 and 20” refers to…
A 2% management fee and 20% of profits as carry. Exact terms vary, and fees have come down at many large funds.
A hurdle rate (preferred return) in a PE fund means…
LPs get a minimum return, often 8%, before carry is paid. Carry only kicks in once LPs have earned the hurdle.
How long does a typical buyout fund last?
About 10 years, often with extensions. Roughly 5 years to invest, then several years to grow and sell.
The private equity track is live in the app.
LBO modelling tests, paper LBOs, investment cases and headhunter prep, on top of the Mandate core. The usual first step is a banking seat, which our IB accelerator is built for.