The difference from investment banking

Banking analysts help clients execute transactions. A private-equity fund buys ownership interests, while associates are employees of the investment firm who analyze and monitor those investments. That shifts the work meaningfully:

Banking: Advisory. Help a client do a deal. Get paid a fee. Move on.
PE: Investing. The fund buys a company or stake, works on an operating plan, and later seeks an exit. Holding periods vary by deal and fund.

Workload and all-nighters vary by firm and deal. The work can include both transaction analysis and longer-term portfolio monitoring.

Due Diligence

The deep investigation a PE firm does before buying a company. Includes financial analysis, legal review, management assessment, market analysis, and operational review. Associates lead much of this work.

What a PE associate does week-to-week

Deal Sourcing PE associates help identify acquisition targets. This means analyzing industries, tracking companies, building relationships with business brokers, and reviewing "deal teasers" (one-page summaries of companies for sale) sent by investment banks.

Initial Screening Firms reject far more opportunities than they pursue. The exact funnel varies, and associates build quick models to screen whether a deal could work at different prices.

Due Diligence When the firm decides to pursue a deal seriously, associates go deep. This means:

Analyzing 3-5 years of financial statements
Building a detailed LBO model
Meeting with management teams
Reviewing customer contracts and churn data
Hiring lawyers, accountants, and consultants for specialized diligence

Investment Committee Presentation Associates prepare the memo and presentation that goes to the firm's partners for a final investment decision. This is high-stakes, if the analysis is wrong, the firm could lose hundreds of millions.

Real-world example

In a hypothetical health-care-software deal, an associate might model several scenarios, interview customers, review major contracts, assess management, and analyze competitors before presenting an investment memo. The scope and timeline depend on the deal.

Portfolio monitoring

Once the fund owns a company (a "portfolio company"), associates help monitor it:

Review monthly financial reports against the operating plan
Track key metrics (revenue, EBITDA, churn, headcount)
Sit in on quarterly board meetings
Work on value-creation initiatives (pricing strategy, new sales hires, geographic expansion)

This is operationally interesting, you are helping run a real business, not just modeling one.

Exit preparation When the fund prepares to sell, PE associates may rebuild the financial model, prepare sale materials, and work with an investment bank. The timing varies and an exit is not guaranteed.

Fun fact

Portfolio-company work tests whether an investment thesis is producing measurable operating results. It can involve reviewing board materials, budgets, customer retention, hiring, pricing, and other business decisions.

The LBO model: the core technical tool

Every PE deal lives or dies by the LBO model. The model estimates:

What price can we pay for this company?
How much debt can the company support?
What are the returns at different exit prices and timelines?
What operational improvements need to happen to hit the return targets?

Compared with a quick screening model, a full LBO model can be much more detailed. Its size and build time depend on the company, available data, and the firm's process.

Scenario

The portfolio company is underperforming

You own a regional retail chain. 18 months after acquisition, same-store sales are down 8% vs the plan. You are 2 years from the planned exit. What do you do?

What is the main purpose of an LBO model in private equity?

What does a PE associate typically do AFTER a company is acquired?

PE work is more strategic and operationally engaged than investment banking, you help run companies, not just advise on their deals. The pace is less relentless, but the analytical depth and stakes are higher.

Why do PE funds eventually need to sell their portfolio companies?

Sources checked

Hamilton Lane 2026 Form 10-K — examples of drawdown-fund terms and extensions; filed 2026
ILPA Continuation Funds Guidance — continuation-vehicle context; accessed July 26, 2026

Private Equity: A Day in the Life