Private Equity Risk Managers
Education and Training Requirements
Recommended classes include mathematics, business, accounting, economics, and computer science. English and speech classes will help you to develop your communication skills. Of course, any college-preparatory courses (e.g., science, history, government) will be useful.
A bachelor’s degree in risk management, insurance, accounting, finance, economics, business, or a related field is required to become a risk manager. Some firms prefer their risk managers to have an advanced degree, such as master’s of business administration (MBA) or a master’s in risk management. Take classes that focus on alternative investments (especially private equity) to expand your knowledge of the field. Private equity firms are highly selective when it comes to hiring, so attending a top-tier college and earning excellent grades will improve your chances of getting hired.
Other Education or Training
Continuing education classes, workshops, online tutorials, and webinars are offered by the Global Association of Risk Professionals, Public Risk Management Association, and RIMS—The Risk Management Society. Topics include risk assessment, risk control, and government regulation. Contact these organizations for more information.
The Institute of Risk Management offers the international certificate in risk management to applicants who pass multiple-choice and written examinations. Visit https://www.theirm.org/qualifications/international-certificate-in-enterprise-risk-management.
Certification, Licensing, and Special Requirements
Certification or Licensing
Becoming certified can improve your job search prospects—especially if you plan to apply for risk management jobs in other fields. Here are two popular certifications for risk managers:
- The Financial Risk Manager designation, which is offered by the Global Association of Risk Professionals, is geared toward risk managers, chief risk officers, senior risk analysts, managers of operational risk, and directors of risk management. See https://www.garp.org/#!/frm.
- The RIMS-Certified Risk Management Professional designation, which is offered by the RIMS—the risk management society, is geared toward risk managers at any point in their careers. See https://www.rims.org/certification.
Experience, Skills, and Personality Traits
Aspiring risk managers should have at least five years of experience in lower-level risk management positions or other occupations in the private equity industry.
Successful risk managers have excellent leadership, analytical, and problem-solving skills. They have a broad interest in private equity and are willing to continue to learn throughout their careers. Risk managers also need experience with PE-relevant risk models and cash flow/liquidity modeling. Strong communication skills are key because risk managers frequently interact with managing partners and other PE executives, as well as with chief financial officers and CEOs at portfolio companies.