The formulas, tricks and trade secrets of Private Equity

Private Equity Firm Structure Hierarchy

Sample Chapter

Private equity firms have quite flat management structures, especially at the middle-market level where everyone is responsible for deal origination, negotiations, due diligence, transacting, monitoring and exiting. But, even with this flat private equity firm structure, there is a subtle hierarchy driven by fund sourcing and dealmaking responsibilities.

Often senior employees in a private equity firm structure focus on securing limited partner investments and dealing with high-profile opportunities. The junior employees engross themselves in financial models, make cold calls to potential investees, and deal with the dreaded intermediaries. In aggregate though, great deals and great returns form the basis of incentives in a typical private equity hierarchy.

Without further adieu, the hierarchy of staff from senior to junior is as follows:

  1. Founding Director
  2. Managing Director
  3. Director
  4. Associate Director
  5. Associate
  6. Investment Manager
  7. Investment Analyst

Although this private equity firm structure (private equity hierarchy) may vary across regions, titles usually correlate quite closely to this firm structure. Employees often enter firms from the bottom up after completing an MBA or other relevant post-graduate study.

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