What are the traits of a successful CEO / CFO in a Private Equity backed business?
Executives stepping off the ‘corporate tread mill’ need to demonstrate an entrepreneurial and analytical mind, take a hands on and pragmatic approach, display commercial nous, an ability to manage all aspects of a P&L and balance sheet, negotiate / present / influence stakeholders at all levels internally and externally and be able to deliver profit improvements when the life cycle of the business is being challenged by macro factors. Furthermore, PE firms will back senior executives that can bring industry knowledge / relationships to the table where they are regarded as ‘leaders in their field’. The executive should be able to quickly identify M&A and divestment opportunities and be capable of leading such transactions. Furthermore, a proven ability to lead a trade sale or advise on an exit strategy via an IPO is imperative.
As an executive, writing out an equity cheque (often the equivalent to one year’s base salary) is crucial to ensuring strong convictions on delivering measurable and medium / long term shareholder value. Gone are the days where the private equity firm along with the CEO / CFO takes on too much debt and where valuations are excessive. It’s all about delivering shareholder value and leaving a legacy of success when an exit occurs in the future. In a competitive industry, I can’t stress enough how reputation in the industry is as important as the next capital raise and transaction.
My experience with PE
I have nearly two decades of market insights and expertise partnering private equity firms across Australasia appointing key leadership C-suite level and NED appointments across a diverse range of sectors. Some recent appointments have been within the food manufacturing, healthcare/diagnostics, retail and technology sectors at the CFO, CEO and Chairman level.
As business leaders, we partner business owners / entrepreneurs in identifying senior executives that display a risk appetite to co-invest in a business where they have ‘skin in the game’ and where the focus is to ensure measured long term shareholder value is achieved usually over a 3- 6 year investment time frame.