Much of this
material was obtained from Private
Equity Blogger. There are other lists of business school rankings, but the
list below is limited to graduate schools that offer programs in private
equity. Currently there are no lists of undergraduate schools that offer private equity programs.
If you want to pursue a career in private equity without going through the usual 2-3 years of investment banking work experience and 2-3 years of graduate school, you should read: How to Break Into Private Equity Right Out of Undergraduate with No Investment Banking or Private Equity Internships.
Another route is to identify undergraduate programs that offer private equity and investment banking courses. Marquette University’s AIM program is now offering a track in Private Equity & Banking that is focused at the undergraduate level. This is one of only a handful of undergraduate business programs that are known to focus on private equity.
Another private equity undergraduate program is found at the University of Maryland.
If you want to pursue a career in private equity without going through the usual 2-3 years of investment banking work experience and 2-3 years of graduate school, you should read: How to Break Into Private Equity Right Out of Undergraduate with No Investment Banking or Private Equity Internships.
Another route is to identify undergraduate programs that offer private equity and investment banking courses. Marquette University’s AIM program is now offering a track in Private Equity & Banking that is focused at the undergraduate level. This is one of only a handful of undergraduate business programs that are known to focus on private equity.
Another private equity undergraduate program is found at the University of Maryland.
What is Private Equity?
Investopedia
defines private equity as capital that is not quoted on a public exchange.
Private equity consists of investors and funds that make investments directly
into private companies or conduct buyouts of public companies that result in a
delisting of public equity. Capital for private equity is raised from retail
and institutional investors, and can be used to fund new technologies, expand
working capital within an owned company, make acquisitions, or to strengthen a
balance sheet.
The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.
The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company.
A private equity
firm launches private equity funds which are large pools of private capital
used to invest in companies. These funds
are managed by private equity general partners, principals, associates,
analysts, in-house or third party marketers–positions depend on the size of the
firm. Fund marketers work to reach a
capital goal for a fund from capital sources, such as institutional investors
(pension funds, endowment funds, etc.) or high-net-worth individuals.
In a typical
buyout: The private equity fund seeks out opportunities to invest its
capital. When the management team
discovers a possible opportunity it will conduct due diligence and valuation on
the firm to decide how much it should offer and what the potential return on
the investment would be. Then the firm
will buyout shares of the company–often using leverage as well as the private
capital from the fund–to takeover a controlling interest in the company.
Buyout firms
invest long term, as opposed to hedge funds or other investment funds, and will
work to improve the company and generate profit through cost-cutting, selling
assets and motivating management (who now have more control of the company,
answering to the PE management, not ordinary shareholders). It will usually install an advisory board to
guide the company; this board is drawn from the buyout firm’s associates,
general and limited partners and others.
Management will receive the kind of support and control necessary to
make concrete changes to the company but, if the management is the problem, the
buyout firm may install new leadership in the company.
After the
private equity firm has expanded or improved the company it will look toward an
exit–maybe through an IPO where shares are offered again to the public, or a
strategic buyer– or decide to invest more money in the company. The exit is how the private equity firm makes
its money back on its initial investment to give returns to investors. The hope is that the company can be sold for
a significant profit.
List of Top
Graduate Schools for Private Equity
There are a very
limited number of business schools specifically offering training in private
equity but many business schools have courses covering private equity, M&A,
buyouts, buying and selling companies and valuation. This list is from the authors of Private Equity Blogger, who have talked
with many graduate business schools about their private equity offerings and
programs.
