The coronavirus crisis has swept the globe over the last year, causing widespread disruption across markets, public lives, schools, people’s health, the global economy, travels, and businesses. Amid all this chaos brought about by the pandemic, it is a successful time for the private equity industry around the world including the UK.
The global PE market is now worth over USD 4 trillion, Preqin’s 2020 Global PE and VC reports. The UK has the most developed market with increased flows of funds in the last five years, amid the Brexit or COVID-19 uncertainty. As a result, private equity jobs are attractive to youngsters and new finance graduates more than yester years.
So, how to get into this full-fledged career in private equity in the UK?
Let’s learn more about it.
Understanding private equity
Private equity firms raise investment capital from institutional investors and individuals and fund equity investments in companies. They may purchase the equity stake of the company or through leveraged buyouts of publicly traded companies. Also, they get equity interest by investing in venture capital or involved in a partnership with other PE firms.
Once it increases the company’s value, they sell it for a profit. The investment horizon is generally five to 10 years. Let’s see the top private equity firms in the UK.
Top UK private equity firms
Get introduced to the top 3 PE firms in London.
CVC Capital Partners
CVC, with its USD 82.4 billion in AUM as of 2020, is one of the 10 largest PE firms in the world. some of their PE investments include recapitalization, acquisitions, LBOs, and venture capital investments. The firm mainly targets industries such as healthcare, energy, telecommunications, financial services, and technology.
Apax Partners has raised USD 50 billion in AUM as of May 2020 and has seven offices in three continents. They invest in large companies and generally target healthcare, consumer goods, and tech services. Their main focus is to pure-play LBOs.
Bridgepoint Capital Group with USD 20 billion in AUM, primarily focuses on acquiring equity interests in middle-market European companies. They target industries providing healthcare, financial, manufacturing, consumer services, media, and technology.
Moving forward, let’s understand how to get into a private equity job in the United Kingdom.
Why private equity?
Young finance graduates and professionals working in investment banks or the finance sector tend to move into private equity because of the following attractions.
• Interesting studies as you analyze various industries
• The salary and bonuses are very generous
• Continual learning about businesses and their success needs
• High networking opportunities and chances to deal with high-profile business individuals.
• Know the strategy to improve a variety of businesses
• Career progression is linked directly to your performance
Private equity salaries in the UK
As mentioned earlier, the salaries are higher. For instance,
→ The average salary for a Private Equity Analyst is £52, 907 in London, UK – Glassdoor reports.
→ The average salary for a Private Equity Associate is £71,453 in London, UK – Indeed.com reports.
→ The average salary for a Private Equity Analyst is £37,500 in London, UK – PayScale reports.
→ The average Private Equity Analyst salary in London, UK is $82,069, where the range typically falls between $62,447 and $101,684 -Salary.com reports.
→ Private Equity Analyst Salaries by Percentile – Source: Salary.com
Getting into private equity in the UK
In general, the top PE firms receive applications in multiple of 100, i.e., for one post, 100 people will apply. So, the competition is really tough. Out of 100 people per post, only 10 will be called for an initial round. After the initial round, only 2-3 will be called for the last round. So, to get into a private equity job in the UK, you should be really special and a differentiator from other applicants.
• As they screen the applications in a stringent way, make sure that you write your application and resume with sincerity.
• The first round of interviews is taken by recruitment agencies and they make an effort to see if you are really fit for the job.
• The next round or the second round is the toughest around. You might be asked to give a case representation with a stipulated time. You will have a skill test of financial modeling basics. Be thorough with the domain to crack this round.
• Once you are through this round, the next round will be a little informal. They may take you to lunch with senior team members, where they judge how you act as a team player, how you can face clients, and so forth.
• The next round will be final. You will face the HR and the partners in this round and get interviewed by a 7-10 people panel. To be frank, very few candidates reach this round. The best among them is chosen to work in the firm.
Generally, PE professionals stay in the field and progress by getting promoted to higher positions. However, many prefer to move to hedge funds or become venture capitalists. You can also start your own firm or join a portfolio company.
If you want to land at an elite PE firm, then upgrade your skills by earning Private equity certifications. It will help you to stay current in the industry and stand distinct among peers.