How a private equity firm is actually built: who does what, how people are paid, how carried interest is cut up, how investment decisions get made, and how talent enters and leaves the system. Written from the perspective of someone who has sat on both sides of the table: as a deal partner allocating carry and chairing IC, and as an LP diligencing "team stability" before writing a nine-figure check.
What the study covers
- 1The PE firm as two businesses
- 2Team structure and the deal-team pyramid
- 3Compensation philosophy
- 4Governance: who decides what
- 5Career paths in and out
- 6Culture, performance management and team stability
- 7Common pitfalls
- 8How an expert thinks about it
- 9Further reading (qualitative pointers)
Technical exhibits
Worked examples, checklists and case studies included with this study.
Roles and Compensation
Org chart and roles table (Analyst → MD/Partner, Operating Partners, Capital Markets, IR, CFO/fund finance, Compliance) with indicative comp ranges
Carry Allocation Worked Example
$2bn fund, 20% carry, 2.0x gross → carry pool, points table, vesting, leaver math, GP-commitment funding
Investment Committee Process
Stage gates (screening → preliminary IC → final IC), the anatomy of a strong IC memo, voting norms, pre-mortems
on Cycle Recruiting
On-cycle vs off-cycle recruiting, headhunters, modeling tests, the timing arms race and the 2024–2025 pushback