What they do:

Conduct financial modeling (LBOs, DCF, merger models). Perform due diligence on target companies: analyze financial statements, market positioning, competitive landscape. Assist in deal execution: prepare investment memos, valuation analyses, and presentations for the investment committee.

Quant side:

Build leveraged buyout (LBO) models: project cash flows, debt paydown schedules, IRR calculations. Sensitivity analysis: "What happens to IRR if EBITDA growth is 5% vs. 8%?" Comparable company analysis (comps), precedent transactions, and scenario modeling.

Vice Presidents (VPs) / Principals

What they do:

Lead deal execution under partners' supervision. Negotiate terms with target companies (price, governance, financing). Coordinate due diligence teams (lawyers, accountants, consultants).

Quant side:

Stress-test models under different exit scenarios. Optimize capital structure to maximize IRR while managing risk. Monitor portfolio KPIs and model follow-on financing needs.

Partners / Managing Directors (MDs)

What they do:

Originate deals: network with investment banks, executives, and other investors. Make final investment decisions and set exit strategy. Fundraise for new PE funds from LPs (pension funds, endowments, sovereign wealth funds).

Quant side:

Strategic portfolio allocation: decide sector focus, risk exposure, leverage ratios. Evaluate fund-level performance (gross vs. net IRR, multiple on invested capital (MOIC)).

Portfolio Management

What they do:

Actively manage portfolio companies post-acquisition. Work with management teams to improve operations, reduce costs, drive growth, and execute add-on acquisitions.

Quant side:

Monitor operational KPIs: EBITDA margins, revenue growth, cash conversion. Model exit scenarios (IPO, trade sale, secondary sale) and calculate expected returns.

Fund-Level Roles

Fund Controllers / CFOs: Manage fund accounting, capital calls, distributions. Investor Relations (IR): Communicate performance to Limited Partners (LPs). Quant side:

Track IRR, MOIC, PME (public market equivalent) metrics to benchmark fund performance. Model cash flow waterfalls (LP/GP distributions, carried interest).

Deal Flow Process in PE

Sourcing / Origination: Identify investment opportunities. Due Diligence: Financial, operational, legal, and commercial analysis. Valuation & Structuring: Build LBO models, negotiate purchase price, set debt/equity structure. Execution / Closing: Legal documentation, financing, acquisition completion. Portfolio Management: Monitor & improve company performance. Exit: IPO, strategic sale, or secondary buyout.

Quantitative Tools & Skills

Financial Modeling: Excel-heavy, forecasting revenues, expenses, debt repayment. Valuation: DCF, LBO, comps, precedent transactions. Risk Analysis: Sensitivity and scenario analysis, stress-testing assumptions. Performance Metrics: IRR, MOIC, cash-on-cash returns, PME. Optional Coding/Quant: Python, R, or VBA for portfolio analytics, scenario simulations, and reporting automation.

Career Progression

Base salary is modest compared to investment banking. Bonuses tied to deal success; carried interest (profit share from successful exits) can be very lucrative at senior levels.

Key Differences from Front Office Trading

PE is illiquid, long-term: capital is tied up for 3–7+ years per investment. Trading is short-term, liquid: focus on daily P&L and market movements. Quant focus: PE is less about stochastic pricing models and more about cash flow forecasting, operational KPIs, and LBO math.