How to get a job in private equity
- Private equity funds invest in large companies that are held privately – that is, not listed on public markets.
- Senior private equity professionals are paid salaries, bonuses and carried interest – a proportion of the profits made when an investment is sold. Salaries are six-figure sums, bonuses can be seven-figure sums, and carried interest can even reach nine-figure sums.
- Competition for private equity jobs is intense – they are some of the most desirable in finance.
- The majority of recruits to the private equity industry join after a period of time in an investment bank.
- Graduate programs and internships do exist in private equity, but are eye-wateringly difficult to get into.
Private equity is a vast industry covering a range of investment firms: from global companies like Blackstone, KKR, and The Carlyle Group to hundreds of smaller players that specialize by geography or sector such as Vitruvian Partners, Sovereign Capital Partners, or Bridgepoint Group. The biggest firms also tend to operate beyond just private equity and also invest in asset classes like real estate and private credit.
In principle, what private equity firms (referred to as General Partners or GPs) do is very straightforward. They collect money from investors (referred to as Limited Partners or LPs), which include pension funds and wealthy family offices, and use that money to buy private (not-publicly listed) companies. They “improve” those companies and then sell them on, traditionally to the public market via an IPO. The profits from the sale are then shared between the firm and the investors, after the investor’s initial contribution is paid back.
Things are more complicated in reality. Private equity firms are often accused of “asset stripping.” They buy companies with loans in structures called leveraged buyouts. Those loans are often taken out against the collateral of the company they’re acquiring, such as the real estate that the company owns, and the acquired company then has to pay them back for the loan raised against its assets. Companies with collateral – like nursing homes (which own the buildings they operate in) and pubs and supermarkets (which also own their premises) are ideal targets.
A classic case study of this phenomenon is private equity firm Clayton Dubilier & Rice (CD&R)’s acquisition of British supermarket chain Morrisons in 2021 in a deal valuing Morrisons at £10bn ($13.5bn). Thanks to this acquisition, Morrisons’ net debt obligations (debts) went from £3.2bn ($4.3bn) to almost £6bn.
Unfortunately, shortly after CD&R’s acquisition of Morrisons was completed, Russia invaded Ukraine, and interest rates rose. As a result, that debt became more expensive to service. Morrisons posted a £1.1bn pretax loss in the year ending 29 October 2023, according to its parent Market Topco. This included £735m in finance costs, such as interest payments. That was after the £201m profit it made in its last full year of public ownership. Morrisons lost another £381m in its latest accounting period, ending 26 October 2025. Meanwhile, CD&R has raised around £3.2bn ($4.3bn) from Morrisons' property portfolio, the Financial Times reported at the start of 2026.
The changing face of private equity
It’s not only the Morrisons’ deal. A period of rising interest rates has made servicing debt challenging and leveraged buyouts increasingly unviable. Although things have recovered slightly in 2025, private equity is still far from its glamorous heights.
Consulting firm Bain & Company detailed the issue in a report from February this year. The firm noted that in a typical 2015 buyout deal, half of the purchase price of an asset could be funded with 6-7% interest rates. As of 2026, that figure was more like a 8-9% interest rate on 30-40% of the asset’s value.
That causes a problem for the traditional buyout model. The only way that a private equity deal becomes really workable is through significant increases in earnings before interest, taxes, depreciation, and amortization (EBITDA - core profitability, basically). The focus therefore has shifted from financial engineering to value addition – Bain calculated that a 2015 investment required a 5% annual EBITDA growth to generate target returns, while a 2026 investment required a 12% annual EBITDA growth.
This has changed the deal landscape a lot. McKinsey’s Global Private Markets Report 2026 showed that, while PE buyout deal value grew substantially (20% up) between 2024 and 2025 worldwide, it also came with a decline in deal count. In those years, megadeals took over the PE market. The average deal size went from $610m to $910m. That is good for megafunds like Blackstone and KKR, but not good for smaller firms.
It's become harder and harder for private equity firms to sell their investments as a profit. Traditionally, PE firms have traditionally exited their investments to public markets as an IPO or via M&A deals to competitors, but these faced tough times in both 2024 and 2025, especially IPOs.
Instead, the secondaries market has boomed. Secondaries are when PE firms sell investments to another PE firm (also known as sponsor-to-sponsor) or to a different fund within the same PE firm (also called a continuation vehicle).
McKinsey’s report showed that secondaries grew in both 2024 and 2025 to take a huge slice of exit volume. It’s not a phenomenon likely to go away soon either. McKinsey estimated that 14% of sponsor-backed exits go to continuation vehicles as of 2026, and that by 2030 this would rise to 29% of exits.
The motivation for selling investments on the secondaries market is relatively self-evident; firms want to cash in on their success to some degree, both to return capital successfully to investors and to pay their own people.
Why do people want to work in private equity?
Despite difficulties, private equity jobs are still highly desirable. This is because, unlike investment bankers, people in private equity are the buyers (as they are part of the "buy-side"). They are investing in companies rather than just advising on deals, and that is a more exciting position to be in.
Job security in private equity is also typically much higher than in a bank, and as you become more senior you are paid carried interest. This is a proportion of profits that are made when a private equity firm sells a company on. Carried interest only applies above a pre-agreed hurdle, but it can be very lucrative and tax effective.
Government research published two years ago showed that the top cohort of private equity professionals in the UK – of which there were about 150 people – earn an average of £15m for 2020 and 2021. Some tax changes have been implemented since that made carried interest less appealing, but there are still huge sums at play.
How do you get a job in private equity?
Historically, most private equity firms recruit junior talent from investment banks. This is because banking juniors have completed a two-year analyst training program and have a good grounding in the fundamental aspects of financial modelling, pricing companies, and Mergers & Acquisitions (M&A).
Private equity firms in the USA often used to hire these juniors before they'd even joined said training programs: analysts start their training programs fully intending to leave for a private equity role as soon as they're done. During a frenzied night of hiring, banking juniors are expected to prepare face-to-face interviews, demonstrate modelling capability, and even comment on case studies. One student was interviewing at 2:30am and 7am, Business Insider reported in January this year.
Backlash last year from JPMorgan CEO Jamie Dimon meant that PE firms in the USA delayed their usual intake procedure, which includes marathon interviews and tests, by a few months. 2027 prospective private equity associates were interviewed in January 2026.
In London, things are a bit more civilised. “I don’t think anyone in the UK wants to stay up interviewing all night as a candidate," Gail McManus says. "But firms here do run very serious assessment days.” That means, again, interviews, modelling, and case studying.
The poaching of junior M&A bankers is a serious problem for banks. In June last year, JPMorgan threatened to immediately fire any of its junior bankers who accepted a job offer from a private equity firm during (or before) their training programs. Goldman Sachs now requires all junior bankers to swear oaths that they hadn't accepted a job offer elsewhere.
A major part of the private equity recruitment process is the case study. Case studies are essentially small-scale simulations in which you are asked by the firm interviewing you if you would invest in a specific business. It is the most important part of the recruitment process because it is, at the end of the day, a test based on how private equity firms operate. We have a full article on preparing for it here.
In recent years, however, many private equity firms have started to hire and train recent graduates of their own. For example, big funds like Blackstone now run their own training programs. But getting a place on these programs can be hard. Blackstone accepted only 0.2% for its graduate program in 2025, Business Insider reported – lower than either Goldman Sachs or JPMorgan, which have an acceptance rate of around 0.7%.
For this reason, a first job in an investment bank is still the best launchpad for a private equity career. “Graduates wanting a career in private equity must get into an investment bank and get into the right team,” says Gail McManus, founder of Private Equity Recruitment. The "right team" means M&A or leveraged finance.
Traditionally, doing an MBA was another route into private equity. Juniors would spend two years in banks as analysts, leave for MBA courses, and get jobs as private equity associates - a system known as the 2+2. This still happens: 8% of London Business School and 14% of Harvard MBAs went into private equity jobs last year. There are complaints that MBA courses are increasingly just a route into private equity.
What are the jobs you do in private equity?
There are two parts to working in private equity. On one hand, working in private equity is about analyzing good business investments and then beating the competition to acquiring that asset. This might be through direct negotiation with a company that a PE firm has identified as a good target to purchase, or through a formal auction process run by an investment bank that’s selling a business to a group of competing buyers.
On the other hand, firms increasingly need to improve the companies that they buy. As we detailed above, the cost of acquiring good targets has become more and more expensive in the last few years; achieving the required improvements in profitability is part of what a private equity firm does now.
Both responsibilities require professionals who are financially astute, such as bankers. This is why junior M&A bankers often move into private equity. However, as we noted above, when you’re working in the M&A division of a bank, you’ll only be advising on the deal. As the advisor, you’ll provide advice on deals and financing. As a private equity professional, you’ll be the one instructing the bank and the person actually doing the deal.
Both jobs can involve an intense workload. But when a deal is live, it’s the M&A bankers that pick up most of the slack. “If anyone will be working all weekend, it will be the M&A advisor, not the private equity person,” says McManus. “You’re calling the shots, and the advisers are doing the delivery.”
Private equity’s job titles are similar to the ones in banking. At the bottom of their hierarchy are the analysts and associates, and this is where you’ll usually start, most often as an associate.
Private equity associates own the models. That means they’ll be able to see the cashflows and analyze what needs to be done to make a business perform better. Owning the models provides essential grounding for taking more senior roles in private equity. You’ll soon be able to identify what makes a good target firm for your private equity firm to invest in.
As you become more senior, you will have more responsibility for running deals and working with senior executives at the firms you’ve invested in. “If you work for a big global firm which works on the multibillion complex leveraged buyouts, you’ll look after a tiny part of a big deal. But if you’re working for a mid-market firm with a £1bn fund, then you’ll be more involved,” McManus says.
Private equity titles are different to investment banking. The bottom of the ladder are the analyst and associates (though there are more of the latter than the former), who typically have five years’ industry experience. You’ll spend another couple of years as a senior associate before making it to director or principal. If you want to make it to managing director, it will take a minimum of 10 to 15 years. The highest rung of the private equity ladder is usually partner.
Fund investment jobs and venture capital jobs
Read More: How to get a job in venture capital
As well as working as a deal professional in a private equity firm, you can also work for an LP as a fund investor. Here, you’ll work for a pension fund or the family office of a wealthy individual and decide where to invest.
These roles are a lot less competitive, and more suited to people with analytical minds who aren’t necessarily extroverts, or highly competitive. LPs are increasingly investing alongside the funds they invest in on big deals. For example, in February 2021, Bill Gates’ family investment vehicle, Cascade Investment, teamed up with private equity firms and pension funds to acquire Signature Aviation, a UK aviation services company.
You could also consider a career in Venture Capital (VC), a once growing and now struggling area of the market. Unlike big LBO houses which seek ownership of already mature large companies, VC funds take smaller stakes in companies and help them reach their “full” potential. VCs are big investors in technology, where start-ups are looking to disrupt established players across industry groups.
They also invest in companies pursuing zero carbon emissions and other environmental goals – so social and governance factors play a prominent role in investment decisions. To enter a venture capital fund, you’ll still need a solid grounding at an investment bank, but more likely to have worked in a specialist sector team such as technology, media and telecommunications (TMT).
What do private equity associates do?
Read More: What does a private equity associate actually do?
The easiest way to understand the associate role is by contrast with the M&A analyst job most associates arrive from. An analyst produces analysis so that a client can make a decision. An associate produces analysis so that their own firm can.
That changes the work in three ways. Modelling is the same skill (although to a different purpose), as you're pricing something you'll own and not something you'll advise on. The diligence is yours to run, from briefing commercial and financial advisers to sitting opposite a target firm's management team and asking detailed questions. And the job doesn't stop at closing either, because investments must be monitored after they are made.
Which skills will you need for a career in private equity?
Read More: The skills you need for a career in private equity
Because private equity recruits from investment banking, the technical basics – such as modelling, valuation, reading a balance sheet – are table stakes. Those get you into the interview, but something else decides the hire.
McManus describes the profile of an ideal private equity professional as an all-rounder - confident and persuasive, but tough in a negotiation. Her test is the coffee shop question: if you were thinking of buying one, what's the first thing you'd do? Visit your local, check whether the toilets are clean, count the staff and see whether they look happy, and private equity is probably for you. If you reach for an analyst report on the coffee sector, you may be better suited to banking.
Commercial curiosity used to be a differentiator, but it is now closer to a requirement, because of where returns come from. As we said above, with cheap debt gone, funds have to earn their money by improving businesses, which means being able to sit with a management team and work out why a supply chain or a sales function is underperforming.
How is AI impacting the private equity industry?
Read More: AI is changing private equity jobs. This is how
AI has become an integral part of what PE firms do now, and what they plan on doing in the future.
For one, AI provides a huge investment opportunity for private equity firms. Blackstone has around $300bn earmarked for AI-related investments both in terms of infrastructure (data centre) investment and direct equity investments.
Secondly, megafunds such as Blackstone and KKR are partnering with AI providers at scale and deploying technologies into their portfolio companies as a value creation exercise. Blackstone has launched an AI services company with Anthropic, for example, and Bain has partnered with OpenAI.
Thirdly, private equity professionals are using AI to make their own work easier. AI tools are very good at sourcing and performing diligence. "What used to be a weekend-long activity can now be carried out in minutes," said Blackstone CTO John Stecher.
Education and qualifications needed for private equity
Read More: The qualifications you need to work in banking, trading, and more
Generally, private equity professionals study the same things as investment bankers. Blackstone and Apollo, for example, hire a lot of finance and business studies graduates, as does European firm CVC. All firms hire humanities students too, however.
Historically, the golden ticket into a private equity role was an MBA. This path was called the 2+2. Two years in investment banking (the length of most analyst programs), followed by a 2-year MBA. Although MBAs are still popular, they’re less of a deal than they were in the past, as private equity firms are increasingly training their own juniors internally.
Other qualifications for PE jobs might include a masters in finance (also a popular choice for prospective investment bankers), a Chartered Alternative Investment Analyst (CAIA), or if you’re in the UK, Oxford University’s private markets investments programme, which lasts six weeks. CFA Institute, best known for its eponymous qualification, has also recently launched a certificate in Private Markets and Alternative Investments.
What’s the pay like in private equity?
Read More: Compensation in private equity (and credit) is starting to become a bit sad now
When it comes to salaries and bonuses, private equity firms usually pay slightly below or on a par with investment banks. Salaries and bonuses vary significantly depending on the firm in question. Our 2026 Compensation & Lifestyle Report found that private equity professionals could earn between $90k and $1.2m depending on seniority, which was very similar to what their peers in investment banking earned.
The real money is not in the annual compensation, but in carried interest, which usually goes to professionals from around principal-tier upwards (although some firms pay carried interest earlier).
Also known as “carry”, carried interest is derived from the profits that are made on the LP’s original investment and is typically 20% of the returns (once a predetermined hurdle rate has been met). To illustrate this with an example: if an LP invests $1bn with the aim of making $1.1bn, and the private equity firm makes $1.2bn – then 20% of the excess (so 20% of $100m, or $20m) is distributed to the deal team. In this way, working in private equity can be very, very lucrative – especially as carried interest is typically taxed at lower rates than normal income is in some countries, such as the US.
As carry is only paid when deals are exited, you’ll typically need to wait around five years or so for a deal to complete – if a deal completes at all. As we mentioned above, private equity is going through a somewhat tough time at the moment.
Our figures below do not include carried interest, which varies significantly between firms based on their size, which is measured in assets under management. Bigger firms pay more than small firms.
As private equity uses a different title hierarchy to investment banking, the numbers should be taken as being “equivalent”, rather than representing professionals with titles such as “Vice President” or “Analyst”.
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