Why work in Private Equity?

Why choose to work in Private Equity and not in Investment Banking, consulting or in a large company?

This interview question requires each candidate to find their own answer. However, to gain some insight, it can be helpful to explore the experiences of those who already work in Private Equity. We interviewed analysts and associates to learn about their motivations, and we organized their responses into the four categories of Ikigai.

Ikigai is a 14th-century Japanese framework for understanding one’s ideal life and motivations. The framework encourages introspection around the following four pillars:

  • What I like
  • What I feel useful for
  • What I can be paid for
  • What I am good at

The Ikigai framework could help you in determining whether Private Equity aligns with “what you enjoy doing by employing your skills to serve a purpose that is meaningful to you and allows you to earn a salary that meets your needs.

In essence, it can help you determine whether you are well-suited for a career in Private Equity.


Ikigai Private Equity


1. What I like

Indeed, we cannot claim that all investors enjoy their job for the same reasons. Nevertheless, we can cite the sources of motivation that come up most often when we talk to analysts. 

1.1. The diversity of the missions

Investors analyze investment projects from several angles. They consider factors such as:

  • the strategy, experience and vision of the management team
  • the current and future financial situation of the company
  • the offer, the competitive advantages and the organization of the company
  • the opportunities and threats specific to the market
  • the legal and fiscal structuring of the operation.

In addition to analyzing new investment opportunities, the investor monitors the performance of investments and anticipates and facilitates exits.

Such a broad range of analysis criteria and fields of action provides significant diversity to the investor’s profession.

1.2. The variety of challenges

As a private equity professional, you will have the opportunity to work with a large number of companies in various industries, regardless of their size or level of maturity. This will enable you to understand different markets, positioning and a range of unique challenges. By considering whether you would like to invest in a particular company for a period of 5 to 7 years, you will take on a similar perspective to that of the company’s managers.

However, unlike entrepreneurs, you will have the opportunity to do this repeatedly. With each new investment opportunity, you will enrich your knowledge and gain new insights. The diversity of challenges and companies studied will keep your daily work interesting and far from routine. This will allow you to experience intellectual growth and a real progression curve.


2. What I feel useful for

Private equity investors play a crucial role in providing funding and support for companies to grow and develop. By injecting cash into startups, SMEs and larger companies, Private Equity acts as a catalyst for their growth, enabling them to hire new employees, undertake new projects, and drive innovation.

As a result, Private Equity investment teams have a vital long-term support role that fosters economic growth, job creation, and innovation.

Read our article on the subject: What is Private Equity?

In its 2021 report, France Invest looks back at the impact of the €17.8 billion invested by French investment funds in 2020. These funds have helped support more than 2,000 companies.


3. What I can be paid for

Having a master’s degree in finance can open up numerous job opportunities that align with the Ikigai philosophy. However, when it comes to compensation, few jobs compare to the earning potential of private equity. Investment teams typically enjoy high salaries and the profession offers more flexible working hours than investment banking. This is why many investment bankers transition into private equity after a few years in M&A.


4. What I’m good at

Investing is not an inherent talent, but rather a skill that requires hard work and experience. According to private equity professionals, finance courses in business school alone are insufficient in preparing one for this profession. To validate this fourth pillar of Ikigai (being good at what I do), preparation is necessary. Invest Prep is here to support you in this journey. You can read our articles and join our complete training program to successfully navigate Private Equity interviews: Discover the training.