Anyone with capital can get into private equity, but those with a solid background and foundation tend to do much better.
The same can be said about those who want to work in PE firms and climb the corporate ladder. Private equity firms hire people from all sorts of backgrounds, but MBAs are some of the most sought after because of their unique set of skills and their holistic understanding of business. Let’s take a look at how an MBA could help you start a career in private equity.
It will Help You Reach Higher Positions
If your goal is advancement, then getting your MBA will greatly improve your chances. Firms tend to favor MBAs, and those without will have a much harder time reaching senior positions.
“You might be coming from an investment bank and get a job at a PE firm, but you’ll basically be a glorified analyst,” said head management fund head Victoria McGill.
“Many junior private equity people leave and get an MBA, come back, and end up in higher positions with other firms. There are people who get into private equity firms with nothing but an associates degree, but if you want to climb up the ranks, then there’s not much room for growth without an MBA.”
If we look at trends across private equity firms, we can see that the majority of executives have an MBA. We can also see that the employees with the longest tenures also tend to have one. So, this is a great option if you want to invest in your future and widen your opportunities.
Not only that but the bigger the firm, the higher the number of MBAs. Here is a list of major PE firms and their MBA concentration according to data from Askivy:
- Apax (77%)
- Blackstone (63%)
- KKR (61%)
- Candover (59%)
- Permira (58%)
Having an MBA is your best bet if you want to get hired by one of the major firms, and most will view senior executive positions as post-MBA, so be prepared for that.
You’ll Benefit from Experiential Experience
MBAs work on real-world case studies and often conduct consultancy projects. MBA students then get a broader knowledge of different industries and functions.
“Getting my MBA allowed me to work with firms in all sorts of sectors,” said MBA graduate Humza Khan. He also stated that his MBA allowed him to work through digital disruption.
“I have a deep understanding of the tech market, and have worked with many tech companies now.”
This has been an issue with private equity firms for a while, with many thinking that the MBA had a tendency to produce students with a rigid mindset. But things have changed greatly, especially with the advent of online degrees.
Schools like the University of Redlands online offer great online MBAs that are at the cutting-edge of technology with a current and ever-changing curriculum to reflect new realities. They prepare students to use current tools and stay in touch with the newest trends in technology and management. These produce students who are naturally more technologically inclined, versatile, and much better equipped to deal with disruptive forces across industries.
Another great thing about MBAs, and online MBAs in particular, is the cross-cultural expertise they bring to the table. MBAs are now more diverse than ever and expose students to people from different countries, all with different market conditions, opportunities, and challenges. Not only that, but they also get to delve into the inner workings of major corporations and gain a better understanding of their corporate cultures and management methods.
“It’s been one of the best parts of getting an MBA for me, being able to connect with people from different backgrounds. I’ve been able to work with people from Russia, Nigeria, as well as a few companies like Colgate and Pepsi,” said Khan.
“I help businesses fundraise through private equity. Many American firms are trying to deploy equity in my market. Having an MBA definitely was an advantage for me in that sense.”
But more importantly, being able to build these connections with people from around the world and across industries will give you the chance to build a strong network that could come handy later on in your career. You never know if someone could turn out to become a private equity investor themselves or be able to facilitate deals for you in the future.
As you can see, getting your MBA could be a great way to help you get into private equity, and will improve your chances for advancement as well. So, make sure that you consider the option, and speak with a counselor today.