NU Executive Talent Trends: Private Equity

Fast Pace, Focus on Finance, and a New Appreciation of HR

Welcome to NU Executive Talent Trends, a periodic look at the changing talent requirements for leaders in various sectors, drawing on the insights of the consultants at NU Advisory Partners.

By Mar Hernandez, Partner and Co-founder

More than half of the assignments we work on are for companies owned by private equity (PE) investors. Private capital is becoming an increasingly significant player in a growing number of industries. In the U.S., 12 million people are now employed by PE portfolio companies. Globally, the assets managed by private capital — private equity + venture capital + family offices + similar investors — increased by 132% to $22.6 trillion over the ten years ended in 2022.  

For me, working with financial sponsors to staff their portfolio companies is addictive. The assignments can be complex. The pace is fast. And the people you deal with at PE firms and their portfolio companies are invigoratingly smart and focused. 

Here’s what we’ve been seeing in our assignments for PE-backed companies across a wide range of industries and leadership roles:

What’s NU in Private Equity?

Every hire at a PE-owned company is seen through a lens of their overall mission: How will this person help us grow revenue, improve efficiency, and contribute to a successful exit? 

PE firms are starting to see the need to build strong talent teams in their portfolio companies. A strong HR function is critical, as many portfolio companies are simultaneously making acquisitions and restructuring their workforce. 

We’re also doing searches to bring senior HR professionals into the PE firms who can think strategically about talent across their holdings.  That’s great news for portfolio companies because they have one person to go to with questions about HR and recruiting.

Finding Executive Talent in Private Equity

When we screen candidates for roles at sponsor-owned companies, we zero in on the financials of their previous employers. If they aren’t keenly aware of how their companies make money, they aren’t cut out for private equity, regardless of their function.

We look for people who can be scrappy and are also sophisticated about strategy. The most important questions involve results: What’s their record for contributing to operational efficiencies and growth?  

Candidates for PE-backed company roles must be unusually agile and adaptable. Rapid change is constant at a PE-owned company. The goal, after all, is to transform companies and sell them as quickly as possible. The sooner the company reaches its financial target and exits, the sooner everybody makes money. 

Executive Careers in Private Equity

In a PE portfolio company, new hires must be prepared to roll up their sleeves and work lean. You won’t have minions to make your presentations for you, as you might working at a big corporation. 

Ideal candidates are willing to earn less now for the potential of much more later. The largest part of the compensation is equity that will pay off when there is an exit.

The portfolio company life isn’t one for people who want to be a corporate lifer.  The people who love it are attracted to a series of challenges. When one job ends because of an exit or strategy shift, there is always another that needs help. Investors notice people who have performed well and contributed to a successful exit, and they often hire them for other portfolio companies.

NU Advisory Partners + Private Equity

Not all PE firms and portfolio companies are the same. We move fast at NU, but when we start an engagement, we spend a fair amount of time with the company’s current leadership and the investors. We want a deep understanding of the company’s strategy and how it makes money. We want to know its challenges and pain points. And we want to assess its current capabilities. With this understanding of the dynamics of the private equity investment case for the company, we can find talent that is truly aligned with their objectives.

Recent Private Equity Placements

CEO, Alaska Communications

Chief Product Officer and SVP, Sales, EPS Learning

Chief People Officer and five senior HR leaders, Modigent 

Chief Technology Officer, Sigma7

Vice President Human Resources, Resource Environmental Solutions

Chief Financial Officer, Switch

Chief People Officer, Lakeshore Learning 

Board Director, EPS Learning

CTO Project, Lakeshore Learning

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