25 May 2021
TYPICAL DAY OF AN INVESTMENT ASSOCIATE Private equity is an extremely complex business, and an associate’s daily responsibilities vary tremendously depending upon the firm the associate works for as well as what stage of the deal process the associate is currently working on. That said, one can paint a fairly broad picture about what an associate’s responsibilities look like overall. Here is a timeline for a “typical workday” for you as a private equity associate:
8:00 a.m.: On the way into the office, you read various news sources, such as the Wall Street Journal or Investor’s Business Daily, and check emails that you received the previous night and this morning to make sure you are prepared to take care of any pressing tasks as early as possible.
8:30 a.m.: You arrive at the office and go through any unaddressed emails. For example, you might see that you have received an investment teaser from a boutique investment bank on a potential sale of a retail chain. Given that you focus on consumer products and that this opportunity fits your fund’s investment criteria, you decide to share the idea with a vice president in your investment area to discuss whether the opportunity is attractive and worth pursuing for further consideration.
9:00 a.m.: You pull up an LBO model template for a different investment opportunity and input a new base-case scenario that a senior member of the investment team would like to review this morning. You have been working on this investment opportunity for the last several weeks and are getting ready to submit a Letter of Intent (First Round Bid) to possibly acquire the relevant business.
11:00 a.m.: You make phone calls to various contacts on the buy-side and on the sell-side to catch up on any news that came out that morning and discuss any new events occurring in the industry or sector you cover.
12:00 p.m.: You catch up over lunch with a former colleague that works at a private equity firm where your firm occasionally co-invests.
1:00 p.m.: You send the updated LBO model to the senior member and meet in his office to discuss your assumptions and the feasibility of the scenario. You notice that the IRR could be optimized using a different debt instrument, and you go back to your office to update.
3:00 p.m.: Given that you received that investment teaser in the morning, you decide to look for relevant sector and comparable company research reports to get a better sense of the available opportunity according to market conditions and research conducted by others.
4:00 p.m.: You receive an email containing the monthly profit & loss (“P&L”) of a portfolio company you are partly responsible for monitoring. You open up the financial model for the company and update the numbers in the model to reflect the actual results you just received and then send the model to the senior member of your investment team who also is responsible for the monitoring of that company.
6:00 p.m.: At the end of the business day, you receive a financial due diligence report for a potential investment that has been approved by your Investment Committee to pursue further into the diligence process. You go through the report and then summarize the findings in an internal memorandum that you have been putting together in preparation for final Investment Committee approval process.
8:30 p.m.: You complete the memorandum and decide to call it a day, have dinner, and go to the gym for a quick workout before heading home.