Career in private Equity vs Management Consulting

A Career in private Equity vs Management Consulting

Finance

Working as a management consultant or as a private equity professional is a prestigious job for college graduates who want to make a lot of money as soon as they leave school. Both careers are attractive picks for graduates looking for a lucrative career. Though they may carry the same prestige and requires an MBA, they are entirely different from one another.

Let’s explore the private equity career and a career in management consultancy here.

Management consulting vs private equity: Job profile

Both the jobs demand extensive knowledge in the field and are challenging. They are rewarding too.

Management consulting is one of the high-caliber jobs and best recommended after an MBA. As a management consultant, you-

  • Analyze the organization’s profile
  • Maximize efficiency in different departments
  • Solve business strategy related problems
  • Suggest new or alternative paths
  • Interviews employees for the client
  • Prepare business proposals and presentations
  • Drive performance and profit

Whereas, private equity career is one of the high-caliber jobs in financial services after an MBA. As a private equity professional, you –

  • Source deals and calculate return rates
  • Conduct due diligence and draft presentations
  • Forecast financial projections
  • Review and comment on legal documents
  • Close the deal successfully
  • Help in company strategies, operation, and quarterly financial reports
  • Prepare the company for sale as it achieves financial goals

Management consulting vs private equity: Job requirements

Both the careers demand a degree from a highly-rated university, Ivy League school, and expect to top the class. Both the firms recruit at prestigious business schools and universities and tend to ignore low-ranked institutions.

To become a management consultant, one has to major in management, law, and economics, whereas the private equity industry demands majors in economics or finance. Obtaining an MBA is highly recommended for both profiles.

Specific skill sets include people skills, problem-solving ability, examine management structures, and identify areas of improvement. They should resonate with C-suite employees. Though private equity firms expect the same set of skills, they also look for leveraging equity investments, conduct leveraged buyouts. Further, they look for strong quantitative skills.

Management consulting vs private equity: work-life balance

In the first few years, neither of the jobs have nine-to-five or Monday-to-Friday fashion of work. Both of them generally work for around 40 to 60 hours a week. Management consultants may have to travel during their first years of service, while private equity professionals at top private equity firms may work till late at night.

Management consulting vs private equity: Salary compensation

The average salary for a Management Consultant is USD 95073 per annum, whereas the average salary for a Private Equity Associate is USD 108052, Indeed.com reports.

The private equity professionals earn a bonus along with their base salary, which varies depending upon the firms they are working with and the type of deal closures.

Moving forward, let’s understand how to be a highly successful candidate in the domain here.

Becoming a highly successful management consultant

Be a strategic thinker and focus on the whole system. Help other team members and leaders to define what success looks like. Have a process-improvement mindset and methodologies, learn to overcome negative consequences, show resilience, and have a deep understanding of performance metrics. Turn data into action.

Becoming a highly successful private equity professional

Gain professional grounding in investment banking, strategy consulting, restructuring, and corporate development along with PE skills. Earn knowledge of specific industries and operating experience apart from your financial modeling and analytic skills. Gain an insight into the business to climb the ladder very fast.

To conclude, both profiles demand specific skill sets and work exposure. Also, both are the most sought-after professions by the graduates. Hone your industrial skills and stay current with the trends to succeed in the chosen career.

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