How many hours do private equity principals work?
At middle-market, upper-middle-market, and boutique firms, Principals might work an average of 50-60 hours per week (again, with longer hours when deals heat up). That said, work/life balance varies significantly at firms in this size range.
Private Equity Associate Lifestyle and Hours
At many smaller funds and middle-market funds, you can expect to work 60-70 hours per week, mostly on weekdays, with occasional weekend work when deals heat up.
The hours will vary depending on your role in the firm. Typically, analysts and associates can expect 80 hours per week, while VPs, Principals and Partners typically work 50-60 hours per week. PE firms are located in cities throughout the world, but no matter where a firm is based, travel is likely to be required.
As for hours, both private equity and investment banking can be demanding careers. However, investment bankers tend to work longer hours, often working late into the night and on weekends. Private equity firms also tend to have a more relaxed work environment and offer more flexible hours.
Middle Market Private Equity (50-90 Hours Per Week)
So just like in investment banking, expect hours to be a little all over the place depending on what is going on work wise, but generally much better work life balance than the larger funds.
| State | Annual Salary | Hourly Wage |
|---|---|---|
| California | $105,335 | $50.64 |
| Oregon | $104,512 | $50.25 |
| North Dakota | $104,501 | $50.24 |
| Oklahoma | $103,753 | $49.88 |
The good thing about private equity is that you can conceivably work between 40 and 50 hours. If your portfolio companies are humming along normally and you're not in a live process, there won't be an awful lot to do. A lot of your capacity will depend on the capacity of the more senior people.
Principals are the next most senior role and usually need to have several years of experience as a VP before making the leap. Principals are evaluated on their ability to find promising companies and close deals on them.
The life cycle of a typical private equity fund is usually ten years, but that ten years generally doesn't start until the team raises substantial capital and it doesn't end until all assets are sold.
| Annual Salary | Weekly Pay | |
|---|---|---|
| Top Earners | $241,298 | $4,640 |
| 75th Percentile | $187,500 | $3,605 |
| Average | $143,004 | $2,750 |
| 25th Percentile | $113,500 | $2,182 |
What pays more PE or IB?
Analysts at all types of private equity firms earn significantly less than Associates, just as Analysts in IB earn significantly less than Associates. In fact, PE Analysts often earn less than IB Analysts! So, you might initially make less money if you start in private equity.
While both careers are highly regarded and financially lucrative, the choice is personal. Investment banking is typically viewed as glamorous but also requires longer hours and the sacrifice of a personal life. Private equity is extremely prestigious.
Sometime between end of Y1 and beginning of Y2 will be IA season, and you will also probably do your EE. This is, in my experience, the hardest time in the IB. You need good time management, good planning skills and good independent research skills to succeed.
Private equity investing often have high investment minimums, which can magnify gains but also magnify losses. Liquidity risk exists since private equity investors are expected to invest their funds with the firm for several years on average.
Drawbacks / Disadvantages:
Still fairly long hours and an intense work environment, and significant travel may be required, especially as you advance. There may not be a clear path to advancement at your firm, depending on the firm's size and policies and your level.
Private equity professionals work long hours and are highly competitive and must think critically, and have a passion for financial investing deals, not just following the markets. Other requirements to start a career in private equity are: Excellent grades and a notable transcript in school.
The specific designation of Vice President or Principal differs at each firm – sometimes Principal is the equivalent of Senior Associate (like at KKR) and sometimes it is the role right before Managing Director. The most senior role is Managing Director and Partner.
How much does a Principal make at KKR in the United States? Average KKR Principal yearly pay in the United States is approximately $248,270, which is 137% above the national average.
$312K (Median Total Pay)
The average Private Equity Principal base salary at The Blackstone Group is $211K per year.
Private-equity firms typically run leaner operations than banks and so have less need to cut jobs during slowdowns. But some have laid off about 5% to 15% of their staff, said Sasha Jensen, founder and chief executive of Jensen Partners, an executive-search firm for alternative-asset managers.
Where do people go after private equity?
Those who wish to broaden their horizons or simply desire a change of pace will often migrate to similar sectors such as hedge funds or portfolio management. Additional exit options include: Being hired as a chief analyst by another firm.
| State | Annual Salary | Monthly Pay |
|---|---|---|
| California | $89,038 | $7,419 |
| Maryland | $88,832 | $7,402 |
| Tennessee | $88,240 | $7,353 |
| Utah | $87,969 | $7,330 |
$286K (Median Total Pay)
The average Principal base salary at Apollo Global Management is $191K per year. The average additional pay is $95K per year, which could include cash bonus, stock, commission, profit sharing or tips.
$390K (Median Total Pay)
The estimated total pay range for a Principal at Bain Capital is $303K–$512K per year, which includes base salary and additional pay.
Key responsibilities for this role include:
Source and underwrite potential investments across asset classes including equity, credit, hard assets, and private investments. Draft and deliver investment memoranda for presentation to the BSOF Investment Committee.
