by Matthew Ayers and David Portney
Stiles Associates
There’s no better time to work in private equity, as PE firms from across the globe place further emphasis on fundraising and acquiring organizations to add to their portfolios. In fact, over the last decade, private equity has outperformed other asset classes and experienced less volatility since 2008, according to McKinsey’s Private Markets Annual Review.
With the marketplace for top talent as hot as ever, you might be considering a move to a portfolio company or bringing on new teammates for a newly acquired organization. Before you jump in with two feet, understand that private equity is not for everyone. In our decades-long experience placing A-players in PE firms and their backed companies, we’ve been able to identify six traits of successful employees who can thrive in the never-dull world of private equity.
They are data-driven
Private equity firms are looking for individuals who have a keen attention to detail. A firm may not know how to best operate the company it acquires, which is normal, but it’s largely full of data-driven people who’ve gone to the top schools and are most comfortable working quantitatively. Successful employees understand the acquired company while working in a data-driven environment.
They move quickly
The typical holding time for a PE asset is between three and five years, meaning firms are looking to see significant ROI shortly after the acquisition. However, even if it’s a long-term hold, they will still care deeply about the details and demand the company and its employees work quickly.
They don’t mind reporting to people at the company and PE firm
Quality PE employees are a good cultural fit in both the company they work in and the private equity firm, which can be vastly different. However, that added accountability to both entities comes at a cost: there’s nowhere to hide. Employees who like to fly under the radar and maintain some level of anonymity could struggle in that type of environment. Typically, the ownership group is in their business on a near-daily basis looking at the data, so successful employees always have the latest details at their fingertips. This can be a key differentiator from publicly held companies, where sometimes its culture and bureaucracy give employees the ability to remain unseen.
They thrive in a risk-taking environment
Private equity is inherently risky based on the speed in which it operates, but what draws people in is the reward. We typically see candidates gamble on themselves by taking a pay cut or lateral compensation for the dangling carrot of equity. They’re comfortable with the leadership team – because they’re mostly paid in equity as well – being incentivized to have a transaction; sell that business; get acquired; or go public.
They have a “love of the game”
Many individuals prefer a laid-back corporate culture, which can be very fulfilling, but great PE employees love the speed and always-moving mentality. They’re willing to throw themselves headfirst into their jobs simply because they love the chase for the payoff at the end. This is different from “cash chasers,” who only want the reward without putting in the work – those individuals are the ones who quickly find out PE is not for them.
They’re a great cultural fit
Does it feel like we’ve alluded to culture throughout the entire blog post? Well, we have and for good reason. We can’t tell you how many times we hear from our clients that culture is everything. The ability to thrive in the office of the portfolio company – whether in person or remote – in addition to fostering a strong working relationship with the PE firm is the most important barometer for success. Candidates can have the entire skill set and determination to succeed, but it won’t mean anything if they can’t work well with all parties.
To learn more about the capabilities of our Private Equity practice, please contact Partner & Vice President Matthew Ayers at Mayers@leanexecs.com.
The executive recruiting team at Stiles Associates has over 30 years of experience working with clients to attract the A-players. If you have a hiring need – whether now or in the near future – contact us right away to get the process started.