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Building A Career In Private Equity: An Insider’s Guide To Being A Successful Associate

Private Equity

After you have locked in the dream PE gig, the next step to building your career is positioning yourself to become a successful Associate with the goal of being promoted (or asked to return following business school). Due to the nature of the PE fund structure, new classes of Associates come and go every year but mid-level and senior professionals stay for long careers. To get promoted beyond Associate, you must show your bosses you are not only a high-quality investor, but a strong manager, team player, and culture carrier. Here are some tips on how to succeed in this first PE Associate role.

Investment Acumen

The core function of a PE professional is to be a strong steward of capital. Developing and showing your investment acumen is key to stepping into the VP role. While speaking with your deal teams about investments, make sure to share your opinion. Good teams and managers will allow the Associates to speak first so as not to influence your thinking. Use this to your advantage, write down your thoughts before your internal team meetings so you have something to say, even if you do not think it is that insightful. Remember, it is OK to be wrong, especially early on! Just get comfortable speaking up.

When it comes to the investment committee, ask to speak up or present the deal. Some funds make the Associates present the deal, others have the MDs do it. Regardless, you should try to speak up during IC meetings. Decisions on promotions and return offers after B-School usually come down to multiple parties, not just the VP or MD you work with the most. Show the whole firm your competency.

Showcasing Management Potential

In deal processes, PE firms hire consultants, lawyers, bankers, accountants, and other experts to help with the diligence and deal making processes. As a team, you will be responsible for outlining and driving the tasks for these workstreams. Typically, the mid-level PE professionals (Principals, VPs) are responsible for managing contacts with these third-party advisors. A great way for PE Associates to step up and show their management potential is to ask to drive one of these workstreams.

For example, PE teams need to judge the quality of the target company’s financials in a deal process. This is done via a quality of earnings (QoE) report that third-party accountants perform. PE Associates can step up by managing that workstream and driving diligence in conjunction with the hired accounting firm.

Additionally, many PE portfolio companies perform small tuck-in acquisitions to acquire new technologies, products, or customers. There is typically some diligence work that requires third-party support for these smaller deals. PE Associates can step up during these tuck-in acquisitions as they are typically less crucial than the larger portfolio deals. VPs and Principals will be happy to offload these workstreams so they can focus on portfolio deals.

Form Relationships with Management Teams at Portfolio Companies

Part of your job as a PE Associate will be to work closely with the management teams of your portfolio companies, from CEOs to Directors of Finance. Work to build positive working and even personal relationships with these management teams. Key skills of VPs and up are to drive board decisions, work with the C-suite, and spot good management talent. Showing your bosses that you can work well with management teams and have good working relationships will prove you can step into this next role. Remember that your bosses may have better relationships with the portfolio company managers than you, and they will ask the portfolio companies what it is like to with you.

Be a Culture Carrier

It’s sometimes not enough to just be a stellar modeler and investor if you want to be promoted. The firm will be judging if you can be the next generation of MD talent and if you can interface with fund investors. You can drive culture by planning company social events, participating in Associate recruiting, mentoring first-year associates, getting involved with internal committees, and representing the firm at industry events. Many firms have D&I, ESG, Social, and Recruiting committees that Associates can get involved with. Attending industry events is a great way to expand your network with other PE professionals and show you can represent the firm externally.

Are you preparing for the buyside? Schedule a call now with our top coaches or submit your application directly here and we’ll be in touch! Our experienced coaches will work with you to set and achieve your goals and provide support and guidance along the way.

You can also check our various course curriculums for different careers (i.e. investment banking, private equity, VC, etc.) and how our process works.

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