How to Become a Certified Private Equity Specialist?

Many investment bankers want to take a step ahead in finance and want to build their careers in Private equity (PE) firms. Private equity firms are smaller than investment banks, so the job role is fewer, and competition is high. Additionally, private equity firms offer several benefits over investment banks, like unorthodox investment capabilities. 

In PE firms, there is a specific designation of employees working, and they also hire entry – level staff as associates and expect the individual possesses two years of working experience as an investment banking analyst. Private equity associates use their knowledge and skills to help investment firms create deals. Thus, if you want to build a career as a private equity associate, then you need to develop the skills and experience to begin the career. 

In this blog, we discuss who private equity associates are and what steps require taking to become one. 

What is a Private Equity Associate?

It is a business executive who works in investment banking to find a potential investor who assists in obtaining investments and performing due diligence with existing customers of an investment bank. The private equity associate will help throughout the journey of dealing like from beginning to end. Private equity associates often serve as the coordinator for the dealing process. 

Role of Private Equity Associate

The associate is involved in various works depending on the respective areas of specialization of the PE firms. However, the responsibility ofa private equity associate is receiving and sending communication teasers to clients, investment bankers, and other sell–side partners. Also, the role includes monitoring the financials and updates related to entities in which the firm is invested. 

Meanwhile, the associate must complete the task given by seniors of any domain, check the report, and consult with prospective clients and companies. 

Steps to Become a Certified Private Equity Associate  

You can use the following step to become a private equity associate:

• Complete Bachelor Degree

The first and foremost step to becoming a private equity associate is earning a bachelor’s degree in finance, accounting, economics, mathematics, and statistics. Also, obtaining higher grades in a bachelor’s degree helps the employer to impress and increase the chance to get desired organization. 

• Develop Technical Skills

Besides completing a bachelor’s, it is also essential to improve technical skills. It includes financial knowledge like investment and accounting processes. 

• Earn Certification

After completing college, if you feel it is important to gain additional knowledge in a specific subject, you can enroll for certification. This program will help expand the knowledge in particular areas and the potential to compete with other clients. 

Some of the top certification that helps you to achieve the tag of certified private equity associate.  The certifications are:

• Chartered Alternative Investment Analyst (CAIA)
• Financial Risk Manager (FRM)
• Associate Chartered Accountant (ACA)
• Chartered Private Equity Professional (CPEP)
• Certified Financial Planner (CFP)
• Chartered Financial Analyst (CFA)
• Certified Public Accountant

• Gain Experience

Most companies will only hire graduates so that they can get experience in the financial services industry for three years or more. To speed up the process, you can intern while still in college.

• Avail Further Education

Private equity associates can further their education by completing a Master’s of Business Administration. A master’s degree will give you an edge over other job candidates because you spend more time learning.

• Use Headhunter

The private equity career is a competitive field; thus, using headhunters or employment recruiting services enables you to find a proper position. Headhunters may ask you questions related to private equity to get a better idea of how much knowledge you have. If you impress them, there is a probability of getting a good job.

• Prepare for LBO Modeling Test

After interviewing firm members, take the Leveraged Buyout (or LBO) modeling test. This timed test requires you to create a financial model of a fictional company. Employers judge you on the accuracy and speed with which your model is built.

Skills of Private Equity Associates

Private equity associates possess the most precious skills are data analysis and communication. It is expected to be proficient in data analysis, modeling, and visualization. Also, they need to have the potential to distill large amounts of information about the company into one–a page summary that helps them seniors make crucial investment decisions. Before landing a private equity associate job, it is essential to have etiquette, as it is a vital skill, and learn as early as possible. 

A Private Equity Associate must also be proficient in Microsoft Office programs like Excel, Outlook, PowerPoint, and Outlook to succeed. They must be able to perform financial modeling, valuation, and accounting, make sound investment suggestions and raise capital. Jargon is integral to finance work – terms such as CIMs, M&As, LBO, IRR, and due diligence. This knowledge will come naturally and is required for any such position.

Conclusion

Associate in private equity participates in deals from beginning to end. The team’s entry-level associates play an important role and require strong analytical and leadership skills. It takes work to land one of these highly sought-after positions. Private equity offers tremendous financial rewards for those who can build a successful career.