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Private Equity vs Investment Banking Career

Private Equity vs Investment Banking Career

Clark alston919 24-Oct-2019

Private Equity and Investment banking raise capital for investment purposes, but in different ways.

Private Equity (PE) is an investment business., whereas Investment banking is an advisory or capital raising service.

Private Equity firms collect high-net-worth funds and search for businesses to invest. PE firms invest their money in privately held companies in a buy-side fashion. PE firms buy a business on behalf of investors who have provided the capital. PE firms involve in the company’s management.

Investment banks find businesses and look for ways to raise money from the capital markets. It tends to act as middle-man by marketing the publicly traded company’s shares in a sell-side function. An investment banker sells the business interest to the investors, where the investors are private companies or publicly-traded corporations.

Let’s investigate more in terms of career perspective.
Private Equity vs Investment Banking

Investment Banking

Investment banking is a banking division concerned with the creation of capital for other companies, governments, and other entities. The major responsibilities include:

•    Underwrite new debt and equity securities
•    Help the sale of securities
•    Facilitate mergers and acquisitions
•    Broker trades for institutions and private investors as well
•    Provide guidance to issuers on stock placement and issues

Job Positions

A few of the job positions include:
•    Consultants
•    Banking Analysts
•    Capital Market Analyst
•    Research Associates
•    Trading Specialists
Educational Background

An investment banker should be a -
•    Graduate in finance, accounting, economics, or mathematics
•    Master of Business Administration is a plus
•    Investment banking certification
Work Culture and Salary
•    You may have to reach the office at 9 AM and leave at 2 AM mid-night
•    It is a high-pressured job that calls for 16-20 busy hours per day
•    There is no limit for earnings. You may earn as much as you want along with a bonus for each deal. According to PayScale, the average salary is USD 90,863 per annum
•    You can gain an opportunity to know the best people in the business
A certification in investment banking helps you climb the career ladder at a faster pace.

Private Equity

Private Equity refers to the firms that invest in companies and sell their investments in equity financing through Initial Public Offering (IPO). The major responsibilities of PE associates include:

•    Screening of potential investors
•    Analyze companies to find new investment opportunities
•    Manage portfolio companies using private equity software
•    Help raise capital, determine uses for investment and predict the return on investment
•    Help execute exit strategies

Job Positions
A few of the job positions include:
•    Associates
•    Vice President and Principal
•    Managing Director
•    Partners
Educational Background
The participating candidate should be a
•    Graduate or post-graduate in Finance, Economics, Investment Analysis, or Accounting
•    Holding a doctorate degree in Investment Analysis, Econometrics, Math or Financial Engineering is a plus for the managerial position
•    Certifications like Chartered Private Equity Professional (CPEPTM) or Certified Public Accountant is preferred

Work Culture and Salary

•    It is an 8-10 hours job
•    Better work-life balance
•    PE firms are generally smaller
•    According to PayScale, a PE Associate earns an average salary of USD 90,863 per annum


If you are interested in business selling then, a career in investment banking may suit you. If you are interested in investment and in-depth analysis, then, a career in the PE sector may suit you.

It’s all about passion, commitment, and dedication that wins the show.

Updated 24-Oct-2019
I am a professional writer, a blogger who writes for a variety of online publications. She is also an acclaimed blogger outreach expert and content marketer. She loves writing blogs and promoting websites related to education, fashion, travel, health, and technology sectors.

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