Doubt that to be the case? Well, take a look at this graphic from PrivateEquityCompensation.com that shows the diversity of backgrounds from hundreds of private equity pros prior to entering the field:
Bottom line, growth is expected to continue in the private equity space as larger funds look for stable and attractive places to allocate cash in a time of great uncertainty. Firms will continue to reflect the longer-term focus by adopting strategies based on building portfolio companies rather than just shuffling balance sheets for resale. This will continue fuel industry demand for talent with diverse backgrounds for years to come.
Granted, breaking into private equity won’t get any easier, as entry will remain ultra competitive. As demonstrated by the lack of professional development provided by most firms in the industry, they simply aren’t interested in training. They much prefer paying for talent that is capable of hitting the ground running and delivering measurable returns from the get-go.
Hopeful candidates need to prepare in advance if they want to be taken seriously. A big consideration for individuals seeking entry is that of pedigree. Where you’ve worked is as important as what you’ve done. Same holds true for education. Those who have earned MBAs from schools offering private equity coursework or curriculums or, alternatively, those focused in areas directly relevant to the specialization of the firm, will have an edge when it comes to landing coveted positions.
The good news is that talented MBAs hailing from industries outside of investment banking now find themselves in demand in an area that was largely off-limits in the past. Those willing to roll up their sleeves inside of portfolio companies will find no lack of career options within private equity today and in the future.
David Kochanek is the Publisher of the Private equity & Venture Capital Compensation Report and the Private Equity Jobs Database. He brings over 20 years of professional experience including mergers and acquisitions, company turnarounds, executive recruiting and nearly a decade with a top 10 consulting firm.