Return to site

Private Equity-On the Job and Day in the Life

Lifestyle Issues

Once you’ve landed a job with a private equity firm, you can expect some of the most interesting, fast-paced work on Wall Street. The pay and benefits will be commensurate with this kind of work—but so will the pressure and the hours.


“Whatever job you take on Wall Street, you aren’t doing it because you like your weekends free.” Those are the very canny words of a major investment banking CEO, and they especially hold true for those working in private equity (especially entry-level workers). Your hours will be long, and you will be one of those people constantly checking your smartphone at soccer games, in the corners of restaurants, or even poolside. These are high-stakes investments, after all, and if you’re helping to manage a billion-dollar stake in a major company, you’ll be held responsible for the outcome.

Entry-Level Lifestyles

At the analyst and associate levels, or in any support role, you can expect long hours—8 a.m. to 7 p.m. wouldn’t be seen as onerous. On the other hand, unless there’s something big pending, your weekends and vacation time can be your own. That said, if you’re supporting the deal-makers, and they’re deep in negotiations with a major publicly traded company, you’ll be expected to be right there with them on a Saturday night at 10:30 p.m.

Executive Lifestyles

In more senior positions, your day-to-day hours can actually be much more reasonable—8:30 a.m. to 6 p.m. in some cases—but you’ll also find the line between work and the rest of your life to blur considerably. Some of your meals will be spent working, while evening conference calls and the occasional late-night panic e-mail will eat into what you once may have considered your private life. Travel will pick up considerably as well, no matter your role. You may have to fly out to Sacramento to convince CalPERS to invest in your fund, or head to Atlanta to finish a buyout deal, or tour a portfolio company’s facility in China looking for ways to improve productivity and cut costs.

It’s not like you won’t be able to take vacations, but since you’ll still be held responsible for outcomes in your absence, most high-level workers in private equity tend to schedule vacations carefully. If you’re in major negotiations for a deal right around Christmas, you may not be able to get away for the holiday. You’d be wise to schedule your summer trip after your portfolio company’s annual report to the fund’s board of directors.

For most high-level private equity employees, this lifestyle is par for the course. If you’ve worked on Wall Street in other capacities, you’re likely used to the trade-off. But if you’re just starting out and are eying a private equity career, bear in mind that your career can quickly become its own lifestyle—especially if you’re successful!

Pay and Benefits

With billions of dollars at stake in each transaction, private equity firms are more than willing to pay for talent—so long as that talent executes properly. You can generally expect salaries, bonuses, and benefits to be at the high end of Wall Street pay scales. It’s not quite what hedge fund managers make, but it’s generally on par with the top investment banking salaries.

In the few entry-level positions available at private equity firms, you can expect to make a base salary of $75,000 to $90,000 as an undergraduate degree holder, and roughly $125,000 as a newly minted MBA holder. There are bonuses on top of that, as well. Some firms have separate personal and companywide bonuses, while others combine them into one bonus. Typically, in your first few years you can earn 25 to 35 percent of your base salary in bonus money.

Once you’ve grown out of these support roles, or if you’re coming into a private equity firm with more experience, the base salary grows geometrically while your bonus money grows exponentially. Those who are in direct-action or supervisory roles can expect base salaries ranging from $250,000 to $1 million or more, depending on how closely they work with fund investors, deal-makers, or the portfolio companies. Their bonuses depend greatly on how well they manage their work. Did the deal-maker get the best terms for the fund? Did the fund raiser bring above-quota money into the fund for the year? Did the portfolio company manager cut costs and boost margins above projections? The bonus money for private equity professionals at the vice president, principal, or managing director levels can be anywhere from two to 10 times their base salaries.

Big Benefits

Of course, like most Wall Street firms, private equity employers generally don’t skimp on other benefits. Medical, dental, and various insurance plans are generally very good. Some firms will also set aside up to 20 percent of base salary in a retirement fund—that’s on top of the base salary, not a cut into it. The retirement fund can, in many cases, be invested in the company’s private equity funds, giving workers an additional stake in their company’s success. Indeed, it’s worth noting that at the managing director level, most companies will take a cut of your bonus money and roll it into the fund for you. Given the outsized returns and personal stake in the firm’s success, few complain.

A Day in the Life: Associate, Midsized Private Equity Firm

6:30 a.m.: I’m already up and dressed and heading out the door to catch a cab. I’m lucky enough to be making enough already to afford a cab to work every day after three years, and I only have to walk a half-block to find one.

7:15 a.m.: In the door at work, a cup of Starbucks in hand. I’ve responded to the most urgent e-mails on my smartphone on the ride down, so at this point, I’m taking on the less urgent or more complicated things that have to be done before the principal gets in at 8:00. Some of these are research items that I’ll have to get to later, others can be answered pretty easily.

8:15 a.m.: I meet briefly with my principal to see where the day will take us. In general, we’re working on two or three different things at once. Right now, we’re in the middle of negotiations with one company, looking at distressed debt at another, and in preliminary research on a third. I’m given some research to do and some calls to make for the day.

9:00 a.m.: A quick chat with my opposite at the investment bank that’s advising on one of our deals. We handle the grunt stuff so the managing directors and such can do their thing. In this case, we’re trying to get details on possible debt structures to do after the deal, to see what both sides can stomach.

10:00 a.m.: I spend the next couple of hours digging up some distressed debt historicals and putting together a profile of our distressed debt idea. I’m starting to wonder whether it’s going to be worth it.

12:00 p.m.: Lunch. Au Bon Pain today. I take it back to my desk and keep working.

1:00 p.m.: My colleague at the investment bank calls back, and it looks like we may have some movement on structuring future debt at the company that’s furthest along in negotiations. I give my principal the heads up and we set up a conference call between their investment bank, our investment bank, us, and the company. We manage to arrange it for 5:00 p.m.—pretty fast.

2:00 p.m.: I prep for the conference call. We gather all the material we have, call and e-mail back and forth, and get a basic agenda ginned up for everyone to see. I give my principal a “to-do” list of things left outstanding. I also order up some dinner for everyone in our office who will be on the call.

5:00 p.m.: We start the call and start hashing out the debt structures. If I have ideas, I pass notes to my principal.

6:00 p.m.: Dinner arrives. We keep going on the call as we eat.

7:20 p.m.: The call wraps up. There’s a preliminary agreement, but both sides have to go back and run it up the flagpole. I head back to my desk to enter my new tasks into Outlook before I head home. That’ll include the flagpole document—I bullet out what should go in there and give it to my principal before I head home.

8:00 p.m.: I take a cab back home. I may work a little after dinner, or not. This was a long day—usually I’m out of the office by 6:00.

A Day in the Life: Fund Raiser and Investor Relations

8:00 a.m.: I arrive at work. I’m lucky in that my position doesn’t require a lot of overnight work. My morning is my own. Sometimes I even hit the gym before I get in, though not as much as I should. I answer e-mails, some from fund holders with questions about recent news reports on private equity, and dig up the latest information on a fund for a status call.

9:00 a.m.: Status call with major investor. This is a major state pension fund that placed a good chunk of money with us. So we give them an update every so often, anywhere from every other week to once a quarter, depending on what they want and need.

10:00 a.m.: Grab a cab and head across town for a sales meeting.

10:30 a.m.: Sales meeting. A major university is considering a placement with us. It’s my job to show them what we’ve done, what our plans are, and the mechanics of making the placement. In this case, they’re interested but want a follow-up meeting with their chancellor and our bosses. So on the ride back to the office, I’m on my smartphone to see which of the bosses would be available and when.

12:00 p.m.: Following up on a lead. Even private equity firms cold call sometimes. A friend introduced me to a private banker a few weeks ago, and I’m following up to see if there’s a chance to do something together.

1:00 p.m.: Lunch. I always try to get out of the office for at least a half hour. It clears my mind and makes me fresher for all of the work I have to tackle in the afternoon. Not everybody has that luxury.

1:30 p.m.: Another status call with an investor.

2:30 p.m.: Reviewing the quarterly letter to investors. It’s early yet, but you want to be out there in front of them, whatever the news, so you can own the message.

3:00 p.m.: Meeting to go over the quarterly letter to investors with the writers and marketing consultant.

4:00 p.m.: Preparing for another sales call, this one for a hedge fund. You target your message differently. I wouldn’t make the same arguments for a university that I would for a hedge fund.

4:30 p.m.: Catching the train out to Connecticut with a vice president who helps run the fund.

6:00 p.m.: Dinner meeting with the hedge fund. When the vice president is there, I tend to let her do a lot of the talking, especially when they get down and dirty with the numbers. I simply keep things moving and make sure we tackle all the high points.

9:00 p.m.: Back to the train station and into the city en route to home, with e-mail messages going the entire trip.

A Day in the Life: Researcher

7:00 a.m.: I get on the train and head into the city with a sheaf of research notes from the night before.

8:00 a.m.: Arrive at work. If it’s Monday, I prepare for the weekly meeting. The Monday meeting tends to last most of the day. Everyone talks about everything the company’s doing, the state of every investment or potential target. And everyone chips in. People come in and out as needed, but for the executive committee, it’s a 9-to-5 thing. Since it’s not Monday, I gather the latest research from Wall Street on potential takeover targets.

9:00 a.m.: Present updates, if needed, to the executive committee on previously discussed targets. This is generally done through e-mail.

9:30 a.m.: I hit the phones. There’s always more to find out beyond what you read in the papers, on the Internet, or in the research notes. I’ll call clients, suppliers, anybody that the target deals with to see how they do things and what their problems might be.

11:00 a.m.: I participate in a previously scheduled interview with a representative of a target company. This is purely informational, and both our guys and their guys know we’re doing it. We’re just saying we want a stake, they’re saying they don’t want to sell, but that’s how the dance begins. So we meet and get a sense of each other at a lower level before we hand it off to the managing directors and the C-level executives.

12:00 p.m.: Lunch, target company rep in tow.

1:30 p.m.: Back in the office, writing up the report on the meeting along with potential follow-up questions and research.

2:00 p.m.: More phone work and computer research.

3:30 p.m.: Meeting with the deal team on a current negotiation. They seem to think they’re overpaying, and they want us to take a look at a piece of the target’s business again. Turns out we hadn’t revisited the topic in a few months, and it was easy to find out what was going on. Probably saved a few million there.

5:00 p.m.: Conference call with portfolio company managers about the latest in supply chain research.

6:00 p.m.: Order dinner while going over the day’s activity on portfolio and target companies. Write up developments for directors as needed.

8:00 p.m.: Home.

A Day in the Life: Portfolio Company Manager

5:45 a.m.: Wake up, quick workout, even-quicker breakfast.

6:30 a.m.: I participate in a conference with a European shareholder. I don’t do a lot of shareholder relations, but they’ll occasionally pull me in if a shareholder has a specific question about a portfolio company’s prospects. They had some concerns about something they read in their local press. I hate the British tabloids.

7:45 a.m.: Ride into work, checking e-mail the whole way.

8:30 a.m.: At work and responding to e-mails. I’ll read them in the car, but I hate typing on a phone. Most of my overnight stuff is status reports anyway, and they don’t need too much help from me.

9:00 a.m.: Conference call with the management team at a portfolio company. This is a weekly thing at most portfolio companies. We go over their numbers and their goals, and see how they’re doing. I make suggestions on improving things or approaches to take. This is a pretty short one. We do a longer monthly one and go out once a quarter for a big sit-down.

10:30 a.m.: I meet with a potential hire. I’m always on the lookout for good turnaround guys.

11:00 a.m.: Car to the airport. I’m heading out to Cleveland for a big quarterly meeting with another portfolio company. I’m on the road maybe twice a month for various things.

1:30-3:30 p.m.: In the air. I’d like to be saying that I’m reading a book or napping, but I’m going over the company’s performance and calling out questions I need to ask.

4:00 p.m.: Car to the company headquarters. Settling in and getting prepared for the rest of the visit.

6:00 p.m.: Dinner in the company boardroom with the executive team. This is sort of the informal meeting before the real meeting the following day with the (private equity) firm’s top brass on the phone. I tend not to ask too many questions here. I want to hear from them how things are going. I’ll pipe up on a few things, but this is their chance to vent at me.

9:00 p.m.: At the hotel and out cold within an hour.

A Day in the Life: Dealmaker

6:00 a.m.: Up and reading the presentation books drawn up by the associates the night before. Phone calls to the associates (“to wake them up”) to get some changes going before the day’s meetings begin.

7:30 a.m.: Picked up by the car. More e-mails and phone calls.

8:30 a.m.: At the office. Check in with the managing director for an update of the previous day’s negotiations and what’s planned for today.

9:00 a.m.: Meeting with the team. We’ll have the updates in the presentation book done, and we’ll have a strategy mapped out. This is simply kind of a double check before we head over.

9:40 a.m.: In the cars and heading to the investment bank. We have a war room set up there, too, but we’re only 15 minutes away, so we do a lot of work back at the office.

10:00 a.m.: First negotiating session. The target company always tends to come up with a new wrinkle overnight, as do we. So we spend the first few hours going through those. Sometimes we can just call each other on our B.S. and move on, but sometimes we have to retrench and figure out what they’re saying.

12:30 p.m.: Break for lunch. Hit the phones to figure out countermoves based on the morning’s presentations.

1:30 p.m.: The real session. This is where stuff gets done. Today we drilled down and agreed upon a value for their major business arm, which was key. We got a lot more than they did out of it.

6:00 p.m.: Have dinner sent over. Informal chatting between the two sides over dinner.

7:00 p.m.: Wrap up the day’s talks.

7:30 p.m.: Convene with the team in the war room and dole out assignments for the overnight. Make a few phone calls to key people and update the managing director again.

9:00 p.m.: Call the car and go home.