Guest blog by Georgina Pawley, Partner, TritonExec
Private equity is a burgeoning market too large not to take notice of, worth no less than three trillion dollars per annum.
As a sector, its presence is widespread yet its exact nature is not always easily understood, however, it exists above almost every single industry – seeking to repurpose existing businesses, acquire new ones and transform companies on all sizes.
In a sector which repurposes business, finding strategic leadership is crucial. Georgina Pawley, Partner at a global search firm, TritonExec, charts the rise and dynamics of private equity on the world executive search.
Still a buoyant marketplace
Although a reduction in the last few years of private equity super-deals, the well-known firms continue to perform well with successes at the mid-tier deal levels. The industry as a whole remains attractive for those wanting more entrepreneurial business environments or operational transformation positions where there is an exciting upside to be earned.
What kind of leadership?
Private equity firms continue to hunt out and attract the top talent investment professionals with a track record in sector-specific deals, often coming from investment banking backgrounds, and in some instances, M&A consulting and strategy firms. Some of the best performers have been homegrown post-MBA hires where employees have been given the opportunity to be a part of some of the more complex and high profile deals.
Industry domain bolstered by tech skills please
When it comes to the portfolio companies where there is increasing pressure to deliver more return on investment (ROI). We have seen an increase in private equity firms hiring executive-level leaders who are technology savvy, commercial operators with deep domain knowledge to deliver robust transformation and cost reduction initiatives.
Additionally, however, it is also critically important that candidates have direct experience of running P&L’s, understand the intricacies of transforming a business for sale, and ultimately have the “chops” to operate effectively in a high-pressure, high-stakes environment.
Industries of increased demand
Over the past two years, we have seen a significant rise in private equity investment in some of our core business areas, specifically fintech, insurtech and healthcare.
Ultimately the common denominator here is that these are industries ready for transformation and where niche solutions developed externally can bring value to key parts of an industry incumbents’ value chain without wanting to disrupt the full end to end. The successes for private equity come from identifying firms able to build the right offering and scale fast enough to become attractive partners to larger organisations, seeking less risky third party relationships.
A challenge for many companies looking to grow is creating a culture that attracts candidates, and also retains them. In this competitive environment, we are also seeing trends specifically in younger talent who are choosing less intense environments for less money, but, where the culture aligns to their core values. As a result, there has been a notable shift in private equity firms becoming less rigid when it comes to legacy norms around dress code, in addition, to aggressively embracing a culture of diversity and inclusion in what traditionally has been a very male-dominated industry.
Volume hires and its impact on Search
We’ve noticed a recent trend from a hiring perspective, across levels, is the desire for slick, volume-focused hiring within portfolio companies looking to ramp up quickly, and bring in the right skillsets for growth – and for delivering the desired ROI. These volume hires typically happen at the mid-management level where we may be building out a salesforce for example, at a level whereby typically a one-off search would not warrant a retained approach, however in a strategic volume hire situation, then an experienced retained search process makes sense.
The wider recruitment market, and private equity
Private equity will continue to be a popular industry, attracting those seeking an alternative to strategy consulting, investment banking and other traditional financial positions, but the competition is ramping up. Private equity firms are increasingly competing for similar talent as the leading tech giants who are offering more than just financial benefits by creating an environment that delivers an employee experience through work-life balance, connection to community and opportunities for development and continuous learning through feedback. Being able to attract and retain the best talent out of schools will determine the difference between those that best succeed and those that don’t.
Beyond Search, private equity is an exciting growth area shaping the entire global recruitment market on every level.