Interim CFOs – Why Use Them?

Interim CFOs are a powerful resource that can be used in a wide array of ways.

In this video, BluWave’s Founder & CEO, Sean Mooney, and Managing Director, Houston Slatton, discuss some of the most common uses of interim CFOs and the benefits to both the PE firm and the portfolio company.

You can learn more about the finance resources we have, including interim CFOs, FP&A experts, and more here.

Video Transcript

Sean Mooney, Founder & CEO: Hi, my name is Sean Mooney. I’m the founder and CEO of BluWave. I’m joined here today by my colleague, Houston Slatton. Today we’re going to discuss one of the most popular use cases in the BluWave toolbox, interim CFOs.

So Houston, how does your team know who’s really good and what’s needed for a private equity grade interim CFO to exceed the standards of a private equity firm?

Houston Slatton, Managing Director: Sure, yeah, it’s a great question, Sean.

First, we’ve got dedicated research teams that are constantly mapping these markets to know who’s really good, know where they’re really good, and know what their specialties are.

Secondly, we use frameworks that you developed over your time in private equity, Sean, to be able to assess them and rate them against particular skills and capabilities, but through thousands of iterations, we’ve been able to take those and take them to the next level and beyond (check out our post that covers the five things to consider when hiring an interim CFO here).

SM: I think you guys have done a great job at that. Candidly, I was pretty good at it. I could do it but I was the king of brute force and it was a craft project every single time, and so what I think you guys have done a great job is through seeing it and doing it over and over and over again, developing these tightly owned processes for assessing who’s really, really excellent at things. I think you’ve done a great job. What do you think about next in terms of other things that you do?

HS: One, we vet them specifically for every opportunity. We want them to give us the “heck, yes,” or “no,” which means really we want them to be self-aware and only tell us it’s a good fit if it really is if it’s a 10 out of 10 project. They’re proud to be in our network, so we get that honesty, but then we also hold them accountable as well, by working with our clients to collect that feedback along the way at the end of projects, to hold them accountable and make sure they’re great.

SM: I think that’s a really powerful part of what we do, is this whole circle of trust. People who are invited into this network are proud to be in it, and they do everything they can to be excellent over and over and over again because it supports their success, and our clients’ success, in this symbiotic fashion. That’s great.

Through what you’ve seen in our client base, Houston, what are some of the ways that people are using interim CFOs?

HS: Sure. I guess one of the top ones is just the unanticipated departure. When a CFO may leave for any number of reasons, it’s great to bring somebody in that can keep their hands on the wheel, keep things moving quickly and continue to make sure the company’s producing at an excellent level.

We also see a lot of groups that need somebody to come in once a deal closes to do what we call professionalize the finance function, get the right monthly reporting packages in place, make sure that the PE firm is getting the information it needs, do any conversions, transformations, things like that to make sure that the finance function of the portfolio company is really up to private equity grade.

SM: Yep, and I think that’s a great emerging use of this resource in that they not only can get things done faster with more speed and certainty, but they get to show, particularly newer CEOs and CFOs, what really good looks like at the private equity standard when a new deal kicks off? What about on the other side of the equation?

HS: As PE firms start to think about selling a company, CFOs have a lot on their plates already, and so we’ve had clients who will bring in an interim CEO or an FP&A resource that can help respond to diligence requests, assess data, pull reports, and allow the full-time employees of the company to keep things moving while keeping the sale process moving without delay.

SM: Yep. I think that is one of the other really surging use cases for interim CFOs or FP&A professionals. The modern-day M&A process is fast and furious, and the second you have to hit pause you can see valuations decline. Our best clients right now are using that so they can run at a really fast pace and not lose momentum during a sales process, so I think that’s another great thing to think about for this type of really excellent professional.

HS: Sure.

SM: I think those are some great insights around a tool that’s been around for a long time in private equity, but is being used in different ways. One of the things that I’ve learned probably most since moving from private equity to BluWave is that experience and velocity and laps around the track really, really matter. When I was in private equity, I would do things episodically and it was hard to become an expert at them.

At BluWave we’re doing things thousands and thousands of time for the very best private equity firms. We have the highest standards in the world and that helps us become increasingly better and better and better every day, and it’s gotten to the point where we’re trusted by more than 500 of the world’s top private equity firms to help connect them with the very best third parties, who we’re very proud to work with as well.

If you’d like to learn more about BluWave and how we can help you, please feel free to reach out to Houston or any member of the team or me, and we’d be happy to do anything we can to help give you just a little more excellence, a little more alpha with ease, in a way that’s supportive of your success. Thank you very much.

Interim CFO: When and Why You Might Need One

When is an interim CFO needed?

Many businesses find themselves in a situation where they need to hire an interim CFO. This can be for a number of reasons, but it is most often due to a sudden change or growth in the company. If you are considering hiring an interim CFO, there are a few things you should know. In this blog post, we will discuss when and why you might need an interim chief financial officer, and we will also provide some tips on how to go about finding the right one for your business.

As your business grows, you will likely find yourself in need of more financial assistance. If your current chief financial officer is not able to keep up with the demands of the job, you may want to consider hiring an interim CFO. An interim CFO can help take some of the pressure off of your current team, and he or she can also provide valuable insights during a time of transition.

There are a few things to keep in mind when hiring an interim CFO. First, you will want to make sure that the individual has experience working with businesses that are similar to yours in size and scope. Additionally, you will want to find someone who is comfortable working on a short-term basis and who is open to being flexible with his or her schedule.

If you are considering hiring an interim CFO, we are here to help. We have a deep pool of interim CFO resources in our invitation-only network. We pride ourselves on our ability to match you with the exact-fit interim chief financial officer you need when you need them. You can learn more about our interim CFOs – including case studies, how-tos, videos, guides, and thought leadership here.

Key things to consider when hiring an interim CFO

  1. Flexibility: When hiring an interim CFO, it is important to remember that this is a short-term solution. As such, you will want to make sure that the individual you hire is someone who is comfortable working on a short-term basis and who is open to being flexible with his or her schedule.
  2. Speed: The head of finance is a mission-critical role for the business and it is a seat you do not want to leave open for any longer than you need. It is imperative that you find someone who can step into the role that aligns with your needs.
  3. Budget: There is a wide range of rates for interim finance executives. Find a resource that fits within your budget.
  4. Similar experience: You will want to find someone who has experience working with businesses that are similar to yours in size and scope.
  5. Cultural fit: Company culture is core to your business. Ensure this is accounted for in your interviewing process.

What about a fractional CFO?

If you are not sure where to start your search for an interim chief financial officer, you may want to consider using a fractional CFO service. Fractional CFO services can provide you with access to experienced professionals on a part-time basis. This can be a great option if you are not ready to commit to hiring a full-time CFO.

We connect you with the third-party resources you need

No matter what route you decide to take, it is important to remember that the goal is to find someone who can help your business during this time of transition. An experienced interim CFO can be a valuable asset to any business.

We connect you with the exact resource you need. Do not hesitate to reach out and ask for help if you feel like your company is in need. You can learn more about our interim CFO offering here or you can connect with a member of our team here to get started.

August 2022 Roundup: BluWave Client Insights

BluWave works with over 500 PE firms from around the globe as well as thousands of their portfolio companies and other proactive independent companies, connecting them with BluWave-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our clients’ musings on value creation through human capital, continued recessionary pressures, DEI, digital marketing, and more.

ParkerGale Operating Team Partner Jimmy Holloran is joined by David Cohen, human capital partner at Kelso and Company. They discuss the various ways that human capital can impact a firm’s portfolio, the biggest value creators during the hold period, how human capital leaders can and should be thought partners, and more.

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SMB founder-owned businesses often don’t have a deep pool of resources like PE-backed companies, but this doesn’t mean they can’t take a page out of the PE playbook during this contracting economy. Heartwood Partners outlines some economic indicators available to businesses, where owners can strengthen their organization during these uncertain times, cost management strategies, and opportunities to revisit a company’s financing ahead of the projected, much stronger economy.

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Insight Partners’ Senior Director Portia Raphael and VP Rachel Bonds explain five key actions that all leaders, not just the human capital function, should consider with the increased attention to DE&I in the workplace. They emphasize that this will be a long-term, dedicated effort that will require thoughtful leadership, purposeful recruiting, inclusive policies, and more, so that people of all backgrounds can thrive.

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Livingbridge investment team members Vernan Richards and Dave Kirby review why marketing as a business function has significantly changed over the past decade, in both B2B and B2C. Since traditional B2B marketing strategies that require face-to-face touchpoints were no longer an option during COVID, digital processes and lead generation were launched or accelerated. This has yielded very strong returns, and Richards and Kirby look at this evolving and aggressive sector.

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KKR Partner Henry H. McVey and Managing Director Aidan Corcoran examine their inflation expectations, inflation volatility, current growth industries like healthcare, and mega themes such as digitalization, cybersecurity, and Europe’s energy crisis. While trimming their growth forecasts, they analyze how many European companies are “enduring the storm” much better than anticipated, a common outcome for the private equity industry during economic downturns. 

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Read what some of our clients had to say last month on turning current market conditions and macroeconomic challenges into opportunity, human capital due diligence, and more.

Human Capital Forum Recap | August 2022

Every quarter we bring together top PE human capital and talent executives to discuss current industry topics and to offer talent leaders in private equity the chance to discuss critical topics of the day. The PE human capital role is rapidly evolving as the private equity industry increasingly invests time and cash flows into human resources.

The BluWave Human Capital Forums follow Chatham House Rule, so our takeaways herein are kept at a high level. Are you in private equity and interested learning the details by joining fellow leading PE professionals during our next Human Capital Forum?  RSVP for our next event on November 2nd.

In our most recent Forum, we discussed many topics including:

  • The private equity industry is seeing the ongoing downturn as a unique talent hiring opportunity.
  • Human capital leaders are working closely with their portfolio company leaders to accumulate best practices and share them across their portfolio for the good of all.
  • The private equity industry is actively polling its portfolio companies to understand the voice of their employees and improve engagement and retention.
  • Human capital leaders are spending significant time bringing additional skills and talent to new portfolio companies and supporting the development of their teams.
  • The PE industry is using data and objective assessment tools to improve portfolio company performance.
  • In the days ahead, human capital leaders are looking to spend more time enhancing culture, supporting leadership development, and sharing best practices during rapidly changing times.

We thoroughly enjoyed these thought-provoking conversations that occurred during this recent gathering of PE human capital professionals. If we can be of assistance, please let us know.

Additionally, you may be interested in checking out some of our human capital specific resources, which can be found here:

July 2022 Roundup: BluWave Client Insights

BluWave works with over 500 PE firms from around the globe as well as their portfolio companies and proactive independent companies, connecting them with BluWave-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our clients’ musings on turning current market conditions and macroeconomic challenges into opportunity, human capital due diligence, and more.  

Joe Zidle: The Optimist Plays the Long Game

Blackstone’s Senior Managing Director and Chief Investment Strategist shares an evaluation of recession indicators while considering near-term macroeconomic challenges. His sentiment is that even though a recession looks like risk at the forefront, recessions are cyclical and business leaders who understand this have an advantage in the long run. Zidle digs into current market conditions and historical examples of different recession outcomes.

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What Is Human Capital Due Diligence? A Lot More Than You Think

ParkerGale Operating Team Partner, Jimmy Holloran, is joined by Laura Queen, founder, and CEO of 29Bison, a human capital consultancy focused on the PE space. They discuss how talent investments can unlock organizational true value and break down the human capital due diligence basics – what it is, how it’s done, and why it’s the fastest-growing of all the diligence workstreams.

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Monitoring Commodities Through Technology

Veridapt CEO David Thambiratnam and Chief Technology Officer and Co-Founder Sean Birrell join the 2022 Macquarie Technology Summit to discuss the role of hardware and software technology in monitoring commodities while battling ongoing supply chain challenges, managing risks, and optimizing operations.

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People Matter: Prioritizing Human Capital Along with Investment Capital

Insight Partners Managing Director Praveen Akkiraju dives into how business builders can invest and prioritize human capital not only to survive the bad times, but to also be focused and ready to accelerate once the good times arrive. He shares why resilience plans start with protecting your human capital.

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Why Europe Will Emerge Stronger From the Current Crisis

KKR Partner and Co-Head of European Private Equity Philipp Freise outlines how the major geopolitical shifts will fuel the European economy, the beginning stages of untapped digitization opportunities, and how the private economy can remain resilient and embrace these challenging times, thus driving global transformation.

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Here’s what some of our clients had to say last month on creating value with digital transformation, boosting operating speeds, software delivery competence, and more.

June 2022 Roundup: BluWave Client Insights

BluWave works with over 500 PE firms from around the globe as well as their portfolio companies and proactive independent companies, connecting them with BluWave-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our clients’ musings on creating value with digital transformation, boosting operating speeds, software delivery competence, and more.  

A letter of intent can vary widely from style to specificity, depending on the buyer’s style. In most cases, the buyer and seller agree that an LOI should not be exhaustive, but there are key pieces it should cover. Montage Partners outlines the five topics for your consideration that they deem essential in an LOI in order to head-off potential future problems.

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The “Playing to Win” framework” allows organizations to have a faster and lighter strategy design process, leverage the integrated choice-making throughout any strategic challenge they face, and significantly boost operating speed by having a clear perspective for decision-making. Insight Partners’ Operating Partner Pablo Dominguez and GTM Strategy Advisor Matt May dive into the five questions associated with this framework and how business leaders can use them to cultivate success.

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ParkerGale’s Partner Jim Milberry is joined by Mangoteque Founder and Principal, Dave Mangot to discuss all things DevOps. Having helped many distinguished organizations become “best in class” through his philosophy of “Getting Good at Delivering Software”, Mangot’s conversation will Milberry breaks down the four keys that define a company’s competence in software delivery.

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An MIT Senior Research Scientist joins the 2022 Macquarie Technology Summit to discuss the role of digital transformation in creating value and improving bottom-line performance, how leadership plays a pivotal role in successful digital transformation, how to think about digital solutions first, and more.

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Strattam Capital Co-Founder and Managing Partner Bob Morse shares his experience with “First Board Meeting Surprises”, when founders & CEOs are often surprised by actions the investment team outlines in their first board meeting post-close. Morse outlines his transparent approach to these meetings known as the Five-Point Plan that he has found successfully avoids shocking surprises and actually gets the founders & CEOs excited about the post-close action plan.

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Here’s what some of our clients had to say last month about digital transformation, PE management, human capital, and more.

Hunt Scanlon 2022: Human Capital in Private Equity

Last month, our team had the chance to attend Hunt Scanlon’s private equity recruiting conference in New York. At the conference, our founder & CEO, Sean Mooney, had the opportunity to sit on the panel, “The Art of Building Private Equity Leadership Teams,” alongside  Jimmy Holloran of ParkerGale Capital, Amanda Roberts of L Catterton, Michelle Nasir of Arsenal Capital Partners, Kit Cooper of Signal Partners, and Adam Zellner of Business Talent Group. There were many value-filled panels throughout the day, allowing for hundreds of PE leaders to discuss and share their thoughts with one another on the current state of strategy, culture, and talent.

The pandemic has both accentuated and accelerated PE’s greatest challenges, and human capital is challenge #1. PE human capital leaders have quickly become the busiest people in the industry, demonstrated by our BluWave Activity Index which shows that 42% of PE projects in Q1 ‘22 were related to human capital, which was up from 36% in the previous quarter. Our key takeaways from the conference below share how talent leaders are staying busy and how they are creating efficiencies to drive more value while they are in such high demand:

1. The Need for a Data-Driven Approach to Talent

  • Business leaders are increasingly recognizing the importance and value of quickly getting the right talent in place across all organizations. According to McKinsey, organizations that get talent right in the first year see 2.5x ROI on their initial investment. Getting talent right is not just a necessity for the C-suite, 90% of critical talent needs in a company lie below the C-suite.
  • With so much at stake if you get talent wrong, many PE firms and proactive businesses are taking a data-driven approach to human capital in order to have best practices to track against.

2. Talent-to-Value

  • Not only does getting the right talent in place quickly improve ROI, it is also crucial to enable companies to deliver on their value creation plans. One way firms are ensuring they get the talent they need is by developing great relationships with their recruiting firms. This allows recruiters to gain a sense for what “talent for that specific firm” looks like.
  • While human capital is critical to value creation, everyone is fishing in the same pond for talent, creating difficulties in getting the talent you need. One solution to this is to take a holistic approach to talent identification & recruitment in which you identify the key targeted areas for value creation in a portfolio company and then systematically focus and prioritize solving the talent that will have an impact on the biggest value creation opportunities. This has been called the “Talent to Value” approach.

3. Growing Emphasis on Culture and DE&I

  • There is a growing emphasis on culture and DE&I in private equity
  • On the DE&I side, each firm needs to take a personalized approach that works for them. A good starting point is to take an initial framework and gather data internally to make sure everyone is included and heard. Then, needs should be measured on a quarterly basis to see how you are improving over time.
  • On the culture side, a focus on internal company culture will help with recruitment & retention efforts, which ultimately, will help you advance your value creation plans. One way to do this is to assess what currently sets your culture apart and then build on it from there. Additionally, interviews should be assessing if candidates have cultural alignment, as much as they are assessing if they have skill and will.

Balancing the art and science of connecting talent to value, amidst a tight market will be the key driver to success as we head into the second half of 2022. If we can be of any assistance, please let us know.

Additionally, you may be interested in checking out some of our human capital specific resources, which can be found here:

 

May 2022 Roundup: BluWave Client Insights

BluWave works with over 500 PE firms from around the globe as well as their portfolio companies and proactive independent companies, connecting them with pre-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our clients’ musings on digital transformation, PE management, human capital, and more. 

The continuous digital transformation of our world has completely changed the way consumers interact with retail brands. In this article, Macquarie dives into how new direct-to-consumer strategies are enabling brands to create personalization at scale, fundamentally changing the future experience of e-commerce.

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Ever since private equity was “institutionalized” about 40 years ago, this thriving ecosystem has grown from roughly 20 PE firms to over 5,000 in the US alone. New Mountain Capital (NMC) CEO Steve Klinsky shares NMC’s growth story, style, and path to success. Klinsky outlines a $5.7B gain from just one company and a replicable process to create value for both businesses and the economy.

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Monomoy Capital Partners investment team members, Matt Farrell (VP) and Charlie Johnson (Associate), sit down to share a little about themselves and what it’s like to be with the organization. This interview shares a peek at their company culture and the investment team.

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In honor of May being mental health awareness month, MiddleGround Capital’s Founding and Managing Partner John Stewart announced their strategic partnership with BetterHelp, the world’s largest therapy service. MiddleGround Capital is working towards ending the stigma surrounding mental health by providing these professional resources to their employees.

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ParkerGale Operating Team Partner, Jimmy Holloran, is joined by Ted Bililies, Managing Director at AlixPartners, on this episode of The Private Equity Funcast to discuss The Great Resignation, the rising prominence of talent recruitment and retention, and more.

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Here’s what some of our clients had to say last month about retail industry news, ESG, and CEO perspectives.

 

Women in PE Forum Recap | May 2022

Every quarter we gather leading women in PE to discuss current industry topics and to offer intelligent women the chance to gather, share information, and decompress with one another. In our most recent event, we gathered to discuss the trending topics of how inflation is impacting the investment life cycle, ESG, and what the future of work looks like in PE. We have shared the themes we heard discussed across different areas below.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. Are you a woman in private equity and interested in joining fellow leading PE professionals during our next Women in PE Forum?  Register for our upcoming Women in PE Forum here.

Inflation: Inflation is impacting every point in the investment lifecycle from capital deployment to portfolio company bottom lines.

  • Deal Flow: From a deal flow perspective, higher interest rates will rebalance how investors think of risk/reward, but there is still $2 trillion of dry powder waiting to be deployed. Valuations are beginning to come down on the public market side, but it may be months (or years) before valuations come down on the private side. In an era of inflation, generating top-tier returns will take old-school value creation to improve a company’s ability to generate profit.
  • Portco: From a portfolio company perspective, inflation is impacting labor, commodity prices, and transportation costs. To reduce labor inflationary pressure, double down on culture, embrace tiered comp structures, and lean into automation. To fight back against commodity price increases, consider multi-sourcing, supplier negotiation, and increase prices where necessary. To address transportation/supply chain issues, consider on-shoring or near-shoring to start to balance sourcing.

ESG: Expectations on ESG are continuing to evolve, shifting from a “nice to have” to a “must have.” ESG has climbed into BluWave’s top 10 use cases on both diligence and value creation in the BluWave Activity Index. LPs are now expecting firms to collect ESG data, report on it, and make meaningful progress over time. Firms are baking ESG into value creation planning and creating thorough checklists that apply to the full portfolio.

Future of Work: COVID has disrupted all dimensions of work, from the work itself, to the worker, to the workplace. Employees are now expecting remote/hybrid work. The role of the office will continue to evolve and move towards a hub for creativity, social interactions, and building culture. The work itself is also changing – more portcos are leaning into technology and automation.

We thoroughly enjoyed getting to gather with other leading women in PE to discuss these trending topics. If we can be of help with any of the above, we’d be happy to quickly connect you to the exact-fit, PE-grade, third-party resources you need.

Interested in learning more about BluWave? Check out our Introduction to BluWave video to learn more about us and how we can help you. If you have an immediate need, contact us here or use the start a project button above – we’ll be happy to help you right away.

ACG InterGrowth 2022: Dealmaking Trends

ACG InterGrowth 2022, known as the premier dealmaking conference, was conceptualized to build and strengthen relationships between private equity firms and investment banks. This annual conference allows PE industry leaders to gather and discuss key trends. Last week was filled with cybersecurity, DE&I, and supply chain thought leadership conversations, plus some Las Vegas style poolside networking.

As hundreds of private equity professionals and investment bankers filled the ARIA Resort & Casino from April 25-27, 2022, our team was able to re-connect with familiar faces as well as meet new ones.

“You could feel the eagerness to be back in person the moment you arrived. From founders to deal teams to business development professionals, the atmosphere was engulfed by ideation and excitement,” says Michael Mahan, BluWave Account Management Director.

Here are some of our team’s top takeaways from our largest conference back in person:

  • Quality Deal Flow Challenges
    PE firms broadly shared that activity is slower compared to last year at this time. Our data confirms this as due diligence projects have declined YoY, from 28% of the BluWave Activity Index in Q1 2021 to now 22% in Q1 2022. While overall deal flows are beginning to increase, deal teams expressed that quality deals are hard to come by.
  • Lights, Deals, Action!
    While ‘digital transformation’ remains a top buzzword, we know that top-performing, proactive PE firms and their portfolio companies are looking to transform their businesses, not just optimize them. Industries such as manufacturing and supply chain are dependent on new technologies to scale growth and meet the industry demand post-pandemic.
  • Market Differentiation
    Building brand equity to differentiate your firm is important in today’s crowded landscape. With less quality deals in the market, it is mission critical for firms to remain top of mind with investment bankers. PE firms are finding creative ways to do this through utilizing specialized resources that can help them with their internal branding, & more.

ACG InterGrowth 2022 exceeded our expectations, and it was great to have the opportunity to connect with so many individuals in person. If you were unable to attend the conference, but are interested in connecting with us, contact us here.

BluWave Account Manager Morgan Murphy concludes, “This year’s conference was instrumental in continuing to build our relationships with PE firms face-to-face. Until next year!”

April 2022 Roundup: BluWave Client Insights

BluWave works with over 500 PE firms from around the globe as well as their portfolio companies and proactive independent companies, connecting them with pre-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our clients’ musings on everything from retail industry news to ESG and CEO perspectives.

Blackstone recently gathered CEOs across their portfolio companies for their annual CEO Conference. While we live in a world where it’s rare for anyone, nonetheless decision-makers, to agree on political or major topics as well as growth and business strategies, here are some key insights that brought the group together. Highlights include recruiting and retaining talent, finding success in simplicity, and keeping ESG at the top of their agendas.

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Vice President at Baird Capital, Becca Schlagenhauf, dives into root causes of grid instability and how the growth in demand can lead to growth in distributed energy resources. The movement towards green energy still comes with its own sets of challenges associated with cost and reliability. As new technologies are being brought online, this has created solutions that are going to be vital to the global electricity infrastructure moving forward.

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Learn about Heartwood Partners’ continual increased interest in different recycling and environmental services businesses and about their notion to “do well by doing good.” Their ultimate interests lie in the recyclability of finished products after they have been used by end-customers. Opportunistic themes and strategies involve packaging, agriculture, consumers, and more.

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MiddleGround Capital Founding Partner, John Stewart, spills his secrets on how their operational focus enabled their companies to build resilience prior to and during the pandemic. Due to the pent-up demand from 2020 in manufacturing and industrials, Stewart highlights the opportunities for American workers as manufacturing wages are spiking. With the industry being under-invested as a whole for the past few decades, the opportunities for business to take advantage in technologies to produce more products is unmatched.

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Here’s what some of our clients had to say last month on cybersecurity, inflation to sales, and more.

PE VP Forum Recap | February 2022

Every quarter we gather Vice Presidents in PE to discuss current industry topics and to offer these peers the chance to gather, share information, and decompress with one another. In our most recent event, we discussed many topics and have listed our top takeaways below.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow PE VPs during our next PE VP Forum? Register here.

 

  • Firm Differentiation: Both fund-raising and then deploying capital are increasingly pressurized in 2022.  Business owners and LPs are trying to differentiate between approaching PE firms. It’s important to LPs and owners (especially founders) that you and your firm are doing something “different”- either from a track record or industry knowledge perspective.  Some firms are leaning into well-defined theses with continued pressure testing, and many are complementing this with additional operational or advisory resources. Firms can make deeper connections with owners by relying on the experience of operating partners or senior advisors who have true industry experience.  Show that you as an investor know where businesses have been, where they are growing, and how you can help them reach potential.
  • Deal Sourcing: When it comes to identifying potential assets for acquisition, firms are approaching this task in different ways.  Some are sticking strictly to investment theses and related lists of companies, then ticking down these lists.  Others are leaning heavily into the connections of their LPs and Partners. Not only does this make networking with business owners easier, but deal teams can move quickly once they have exclusivity due to their existing knowledge of the vertical. Focus on geography worked to the advantage of some firms during the pandemic, and firms are finding it easier to build a relationship with business owners who are local to them. Whether this means more in-person meetings or simply the connection between people from a similar area, it’s driving meaningful deal flow.
  • Developing and attracting junior talent: How to get junior talent in the door? If your firm is based in a smaller or more regional city (St Louis, Detroit, Nashville), stay in touch with those who are local to the area but may be working in banks along the coast.  Many were interested in returning “home” during the pandemic. Other firms are cultivating relationships with local investment banks and hosting happy hours to meet with potential associate talent, thus creating a local pipeline to source junior talent. Some firms are looking beyond strict modeling skills (which can be taught), and leaning more into prioritizing soft skills and executive presence. Once these hires are made it’s important to get them involved in workstreams that make them feel like they’re contributing to firm initiatives. Culture is key, which is becoming easier as people return to the office.

We thoroughly enjoyed getting to gather with PE VPs to discuss these current industry hot topics. We’s be happy to connect you to the PE-grade, exact-fit, third-party resources to assist you in this tight market, just contact us here.

Learn more about how we can specifically help Deal Quarterbacks and access a toolkit that can help you do your job more efficiently here.