Private Equity MBA

Private Equity is a Top Destination for MBAs

Private equity is a top destination for business school graduates because it carries some great benefits and private equity is a challenging, rewarding atmosphere for bright young talent.

A story by the Wall Street Journal suggests that the biggest incentive is monetary. The lowest-level employees at private equity firms earn on average $215,000 a year. That salary increased 29% from the previous year, so MBAs can expect to begin their private equity career earning a high three figure salary.

The emergence of hedge funds may also benefit MBAs breaking into the private equity industry by providing competition for buyout firms. Private equity recruiters have responded to hedge fund competition by increasing incentives offered to MBAs, hoping to retain their access to the elite recruitment pool. Private equity firm managers have spread the carried interest--the profit private equity firms receive from buyout deals--among the lower-level positions in firms. In comparison to the 29% pay increase from 2006 to 2007, firm managers' salaries only increased by 9.3%. Although some predict a decline in private equity, it will certainly remain a top destination for young MBAs.

WSJ source

For more on private equity MBAs see the list of The Top Private Equity Education Programs

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