What Does a Private Equity Consultant Do?

A private equity (PE) consultant is an experienced professional who advises clients on private investment matters. In particular, they focus on investments involving the acquisition, management, and structuring of privately held companies, alongside the practical formation of funds.

Private equity opportunities exist throughout the world, and these professionals support clients in both international and domestic matters, operating across multiple jurisdictions. When navigating the investment landscape, it’s worth understanding where these professionals fit in. We’ve created this article to provide insights into PE consultants’ key responsibilities, areas of focus, and how they provide value throughout the investment cycle.

Overview of Private Equity Standards and Regulations

Private equity is a form of investment that is not listed on the public exchange, focusing instead on utilizing capital to gain ownership of private companies or delisted public companies. As a result, a private equity consultant is essential to provide support in elements such as structuring equity transactions, regulatory compliance, designing fund vehicles, and preparing documentation, among other elements.

It’s important to recognize that private equity contracts, regulations, and standards are distinct from those related to other forms of investment-focused. While they sometimes intersect with venture capital or mergers and acquisitions (M&A), there is has a much broader focus than either of these, dealing with long-term fund lifecycle management, more complex deal development, and nuanced investor relations.

Core Responsibilities of a Private Equity Consultant

When answering “what is a private equity consultant?”, it’s important to understand that they have a range of responsibilities. They’ll draft and negotiate documents related to acquisitions, mergers, capital raises, and management agreements. Another key duty is to provide investors with compliance advice on international and domestic investment regulations, including securities requirements and investor disclosure obligations across all relevant jurisdictions.

In the early stages of investment, private equity advisors will head up due diligence discovery processes on target companies or funds. They’ll review contracts, identify any liabilities, and flag other relevant issues. Should the transaction progress, consultants coordinate with financial, tax, and regulatory specialists to structure compliant deals. Throughout the transaction, they’ll also represent clients in negotiating favorable terms and managing any conflicts that arise.

Fund Formation and Structuring

Private equity funds typically take the form of limited partnership-general partnership (LP-GP) structures, in which the general partners (GPs) manage the fund, while limited partners (LP) are passive investors of capital.

During formation, consultants will draft governing documentation, which will include clear limited partnership agreements, subscription contracts, and offering memoranda. These documents cover everything the investment mandate to the responsibilities of GPs and safeguards related to investors’ rights. 

Standards and regulations governing the actions of private equity funds will vary between jurisdictions. Therefore, advisors must understand the tax treaties, investor eligibility rules, and disclosure obligations of each relevant country and advise fund managers accordingly.

Buyouts, Mergers, and Acquisitions

Propfessionals must support funds through a range of acquisition types and leveraged buyouts (LBOs). Especially in the case of LBOs, where funds borrow capital to acquire companies, teams diligently structure transactions to allocate risk and ensure clauses to enforce terms.

During buyouts, mergers, and acquisitions, private equity professionals draft and review comprehensive transaction documents. These will include share purchase agreements (SPAs) and asset transfer contracts, establishing the details of ownership transfer processes, warranties, and indemnities to safeguard funds’ interests. They’ll also represent the firm in SPA negotiations.

Importantly, advisors manage regulatory and antitrust compliance throughout acquisition. Particularly in cross-border acquisitions, they coordinate with regulatory bodies, ensuring transactions are aligned with the nuances of the jurisdiction.

Regulatory and Compliance Advisory

A core part of a private equity consulting firm’s duties is to help firms navigate regulatory frameworks in relevant jurisdictions. These may include regulations outlined by the Securities and Exchange Commission (SEC) in the U.S., the E.U.’s Alternative Investment Fund Managers Directive (AIFMD), and the Financial Conduct Authority in the U.K., alongside other local regulatory bodies. 

Each framework has unique rules related to fund management and disclosure obligations, as well as standards for maintaining ongoing compliance monitoring and periodic reporting. Advisors provide key guidance to clients about how best to meet the relevant obligations and often draft policies to guide clients’ management processes and periodic audit preparations. In situations where PE funds have cross-border investments, consultants will advise clients on strategies to navigate investment restrictions and meet specific jurisdictional requirements.

Role in Private Equity Secondaries

Private equity secondaries see existing investment partners sell their stakes in the fund or individual portfolio companies. These are quite complex transactions, requiring consultants to play a role by carefully structuring, negotiating, and closing deals. They’ll draft transfer agreements that provide clarity on terms for all parties, alongside managing the notice and consent processes. They also handle matters of fairness and sensitivity, such as maintaining buyer or seller confidentiality and implementing procedures that safeguard the rights of existing investors.

Skills and Expertise Required

To excel in private equity consulting, there are certain skills and expertise professionals require, including:

• Niche knowledge – They should have extensive knowledge across corporate, tax, finance, and regulatory areas relating to private equity.
• Negotiation phase skills – They must be able to effectively represent clients’ interests in high-stakes negotiations, balancing assertiveness with diplomacy. They must also draft documents that provide clarity and robust protections. 
• Cross-border experience – Private equity regulations vary between international jurisdictions, so professionals must have experience navigating these complex frameworks.
• Transaction agility – They must be able to handle transactions involving multiple parties and high-value assets. Therefore, they should have agile project management and regulatory coordination skills.

Private Equity Consultant vs Other Similar Roles

Corporate advisors and M&A professionals may be involved in elements of PE transactions. Yet, private equity consultants play a more comprehensive role, engaging in influencing structure, strategy, governance, and compliance. There are differences between private equity vs venture capital professionals, who handle lighter regulations and shorter lifecycles. PE professionals are involved in fund lifecycle management, becoming trusted advisors to the firm, helping it navigate contractual and regulatory challenges all the way through to exit, ensuring the fund’s long-term health. They’ll also contribute to supporting positive investor relationships, handling disputes, and enforcing rights.

Global Scope of Services

It’s important to understand that private equity regulations aren’t bound to a single jurisdiction, due to frequent cross-border investor engagement. Professionals support clients navigating the complexities of multi-country operations, including advising on structuring international funds, complying with foreign investment regulations, and adapting to currency controls. This isn’t simply about advising on differences in standards. Rather, it sees consultants becoming essential strategic influencers, facilitating coordination between funds and companies in different landscapes, supporting successful globalization, and impacting long-term financial health.

FAQs

What does a private equity consultant do?

They primarily advise on issues related to investment funds, company acquisitions, and fund management agreements.

What is a private equity conultant responsible for during a deal?

They manage due diligence processes, contract drafting, negotiations, and compliance.

How is a private equity consultant different from a corporate advisor?

Private equity consultants specialize in fund structures and acquisitions, often within a global investment context.

Do private equity consultants work internationally?

Yes, they serve clients operating globally who require multi-jurisdictional support and cross-border structuring.

What is the role of a consultant in private equity secondaries?

They structure and document transfers of fund interests or portfolio assets between investors.

Are private equity consultants involved post-investment?

Yes, they often provide ongoing advice on fund operations, regulatory updates, and exit processes.

References

Gibson, J. (2025, April 10). Limited Partnership (LP): What It Is, Pros and Cons, How to Form One. Investopedia. https://www.investopedia.com/terms/l/limitedpartnership.asp

U.K. Parliament. (2022, July 15). Regulation and practices of private equity. UK Parliament. https://lordslibrary.parliament.uk/regulation-and-practices-of-private-equity/

European Commission. (2024, March 25). Implementing and delegated acts – AIFMD. European Commission. https://finance.ec.europa.eu/regulation-and-supervision/financial-services-legislation/implementing-and-delegated-acts/alternative-investment-fund-managers-directive_en