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Private Equity Hiring Strategies
The past few years have seen some interesting changes in the hiring strategies of private equity firms looking to boost their returns.
In the heyday of private equity, firms looked for a rapid return on investment driven by financial re engineering and the availability of cheap debt. The rampant increase in the value of the assets was driven as much by the easy availability of money as it was the increase in the profitability of the companies themselves.
Low interest rates have seen a huge amount of money tied into private equity funds as pensions and fund managers struggle to find areas that generate a return given the continual low interest rates. This has made it a seller’s market, and whilst it means that there are several funds that have managed to sell assets at significant upside, the hiring strategies for companies has now had to change.
The traditional 3-5 yr turnaround or "flip" has in reality moved to 5-7 yrs and a lot of the more straightforward financial re engineering will have been done. As such, rather than a sole control on costs in order to pump up valuations, these organisations now need to demonstrate a clear growth in top line returns.
From a recruitment point of view, this has resulted in significant change in the behaviours of those firms. As ever the FD will remain a crucial appointment, but, whilst cost control and fantastic financial acumen will always be crucial increasingly the pressure comes when hiring commercial roles.
Over the last couple of years we have seen companies place significant emphasis on trying to attract the best commercial talent. Increasingly sales, marketing or trading directors moving from large organisations, who can make the transition into much smaller companies, have seen their stock grow significantly.
However, it should not be underestimated how difficult a jump this can be. We do a significant amount of work within SME privately owned organisations, and success there is not easy. Also, being successful within a large organisation where significant decision making is out of your hands and political ability can sometimes be as or more important than bottom line results will not drive success in a smaller privately owned business.
For the right people the rewards are there, however to identify those individuals you need to pick a search partner who understands the challenges that these people face and with the right experience to be able to identify those who are likely to succeed.
Page Executive has a proven track record, across our global network, of providing innovative recruitment solutions to address these challenges for organisations. To discuss recruitment challenges and strategies for your business, get in touch with Simon Nolan, Head of Consumer Practice.
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