Private equity: what the funds do, and how they hire bankers

01what a fund is

• General partners manage, limited partners pay¹

  A private equity firm is the general partner: it raises money for a fund organised as a limited partnership, then invests and manages it. The investors are limited partners, whose involvement in investment decisions is restricted and whose liability is capped at what they committed. The terms between them are set in a limited partnership agreement.

• "Two and twenty"¹

  A fund typically charges a yearly management fee on committed or invested capital - 1% or 2%, say - plus a performance fee on profits above a benchmark, often 20%. The performance fee is the carried interest, and it is where the large money in the industry is made.

• Control, then change^1,2

  The typical strategy is to take a controlling stake in a portfolio company and take an active part in running it to increase its value; some funds specialise in minority stakes in fast-growing businesses instead. Buyout, growth equity and venture capital are all private equity strategies in the regulator's definition.

• Ten years, and not easily sold³

  An investment in a fund typically runs ten years or more, withdrawals are restricted, and returns may take several years to appear. The SEC also warns that firms often have interests that conflict with their funds, charging portfolio companies for services on top of the fees the funds pay.

next: the european market in 2025 →

02the european market in 2025

• The second-best year on record⁴

  European funds raised €147bn in 2025, up 16%, and invested €135bn, both the second-highest figures Invest Europe has recorded. Buyouts were €90bn of the investment. For a European analyst, the buyers are there.

• The money is increasingly American⁴

  Almost 30% of the money raised by European buyout funds in 2025 came from US investors, per the same report. That is one reason the large US funds' London offices, and European funds with US investors, dominate what an analyst in London sees.

• London is where the funds are⁵

  Every US mega-fund has a London office, as do the European funds - Ardian, BC Partners, Bridgepoint, Cinven, CVC, EQT, PAI and Permira among them. The London page covers why that makes London the best European city for this exit.

next: on-cycle recruiting in the us →

03on-cycle recruiting in the us

The large US funds hire first-year analysts in a burst of interviews for jobs that start one and a half to two years later. It is the most extreme calendar in finance, and in 2025 the banks pushed back.

• What on-cycle is^6,7

  Mega-funds and upper-middle-market funds run it for analysts at bulge bracket and elite boutique banks in New York. Headhunters, paid a share of the placed candidate's salary, run the first stage; interviews, modelling tests and offers follow within days, for a job that starts one and a half to two years later.

• The calendar kept moving earlier^8,9

  The process began on 29 August in 2022, 21 July in 2023 and 24 June in 2024. Over about five years it moved from October to June or July, which often meant the week first-year analysts began their jobs - interviewing for the next job before starting the first.

• JPMorgan made it a firing offence^9,10

  Jamie Dimon called the practice unethical, and in June 2025 JPMorgan's banking heads told incoming analysts that accepting a future-dated offer within the first 18 months, or skipping training to interview, would end their employment. Goldman Sachs and Morgan Stanley moved to quarterly attestations, Citi to case-by-case review, and Bank of America to reassigning rather than firing. Apollo, General Atlantic and TPG then paused until 2026.

• The 2026 restart, in one day⁹

  The process restarted on 5 January 2026, for 2027 associate roles, with more than a dozen firms including Blackstone, Apollo, KKR and Thoma Bravo. Most interviews happened that day; one candidate was asked to sign on the spot before leaving the building. Recruiters said candidates with five months of deal experience were more prepared, and funds filled more of their classes this way.

• On-cycle fills less than you would think⁹

  Apollo said it generally fills less than 50% of its associate class through on-cycle recruiting. The rest comes through later, slower processes - which is the realistic route for anyone outside New York or outside the largest banks.

• Selection is decided before the interview⁶

  Who gets on-cycle interviews is decided almost entirely by pre-existing criteria: university, bank and group, grades. Offers from the first 72 hours usually explode on the spot, and tests run two to three hours for an LBO model, sometimes with a take-home case.

next: recruiting in london and europe →

04recruiting in london and europe

• Two windows, three or four months ahead¹¹

  London recruiting runs in two main windows, September to early December and January to April, and interviews are typically three to four months before the job starts rather than one to two years. A process can take three days or four to six weeks.

• Headhunters and the bank's name still decide the first cut¹¹

  Headhunters matter as much as in the US, and funds recruit mainly from bulge bracket banks and the best-known boutiques, with Rothschild treated as close to an elite boutique. M&A and leveraged finance analysts have an advantage over ECM and DCM. Firms are slightly more open to unusual backgrounds than in New York.

• More rounds, and more consultants¹¹

  A London process can run five rounds or more, from informal conversations to partners, with a one-hour modelling test early and a case study later - a model and an investment recommendation built from an information memorandum over anything from twelve hours to a few days. More consultants get in than in the US; some firms aim for half bankers, half consultants, mostly from McKinsey, Bain and BCG.

• Languages break ties¹¹

  Between two candidates with similar profiles who perform equally well, the one with a useful European language will almost always be chosen, and some teams hire for a specific language from the start.

next: the interviews →

05the interviews

• Two or three rounds at minimum⁷

  Expect at least two or three rounds with people at different levels, covering fit, technical questions, your own deals, the firm's strategy and portfolio, and the market. Firms and teams are far smaller than in banking, so fit weighs more.

• The paper LBO¹²

  A simplified buyout worked with pen and paper in five to ten minutes: purchase price, debt, a few years of cash flow, exit, then IRR and multiple. It is primarily a private equity screening tool, which is why it matters for this exit more than for the first banking job.

• Know your deals at three lengths⁷

  The deals on your CV are the material: the rationale, the structure, the numbers and what you would have done differently. The fit page's advice on having one deal you can discuss in depth applies twice over here.

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