Category: Event Recap

Operating Partners’ Forum Recap | January 2022

January 25, 2022 Delaney Walker

Every quarter we gather Operating Executives in PE to discuss current industry topics and to offer peers the chance to gather, share information, and decompress with one another. In our most recent event, we gathered to discuss lessons learned in 2021 that will be reinforced in 2022, creative ways to respond to the Great Resignation outside of paying portco teams significantly more, lessons learned from the seismic shift in traditional economy companies from field sales to inside sales approaches, and more.

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 Operating Executives during our next Operating Partners’ Forum? RSVP for the April 13th virtual forum.

  • Innovation from the COVID period and a return to basics: The COVID period has brought a focus on innovation in addition to a doubling down on the basics.  Some of the fundamentals in making a company more valuable were sidelined over COVID due to many pressing and urgent pivots forced by the pandemic.  Many operating partners are returning to the basics like pricing structure, automation, and expense management, as they can drive change faster and management teams are more open to listening.  That said, the remote world continues to challenge relationships with portfolio companies and their management teams, and many ops teams are trying to solve for this by taking the opportunity to visit companies in person whenever they can safely do so.
  • Pervasive human capital issues due to wage inflation and scarcity: Nearly every participant expressed challenges related to turnover, recruiting, and wage inflation.  These issues are complicated by the virtual or hybrid work postures of portfolio companies. PE firms are holding monthly portfolio-wide forums with key portco execs to share best practices.  Portcos are doing things like town halls, stay interviews, and regular employee engagement surveys.  PE firms are staying closer with portfolio management teams to ensure they have a handle on turnover, wages, and local comps. Culture continues to surpass most other factors in attracting and retaining key talent.
  • Moving from field sales to inside sales: Portcos with field sales teams are shifting to inside sales.  Operating teams are helping equip these evolutions in a number of ways, including ensuring portcos have the right talent for the roles and bringing in expert advisors to help get the plan right the first time. Shifts to inside sales are being coupled with greater emphasis on account-based marketing, brand, content, and thought leadership via social media.
  • Digital transformation has been rapidly accelerated: After never quite gaining traction pre-COVID, digital transformation initiatives have been pulled forward by years. Popular digital transformation use cases included remote work, telemedicine, sales and marketing, and cloud migration. Digital transformation initiatives were previously justified based upon potential cost savings, but are now being made with customers and top-line growth in mind.
  • Analytics Taking Hold: COVID caused many to go deep into their data to inform strategies and tactics. PE firms are now building true analytics capabilities (including SQL, Python, and R know-how) internally and externally.

We thoroughly enjoyed getting to gather with PE Operating Executives to discuss these current hot topics and discuss how 2021 learnings will influence 2022 plans. If we can be of help placing interim executives, connecting you to a group that can help facilitate a digital transformation, or be of help with any other need, please contact us.

Interested in learning more about BluWave? Check out our Introduction to BluWave video to learn more about us and how we can help you.

Women in PE Forum Recap | November 2021

November 19, 2021 Kyle Johnson

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 key learnings from 2021 and goals for 2022. 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 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 Forums here.

  • BD and origination: After a year of increased competition and a lack of in-person events, firms have had to find unique ways to offer LPs a good answer for “Why you?” A number of firms are moving to more specialization from an investment strategy perspective—potentially developing new theses and then marketing these changes. Some firms have also taken the approach of becoming more explicit with bankers as to the composition of their portfolio for the purpose of proactive add-on identification.  Many BD teams have optimized their external relationships with more regimented and organized outreach—and been unafraid to follow-up with persistence, even if that had not been needed in the past.
  • Investment teams: The theme of this year has been finding ways to optimize time. Deal teams are being more judicious with travel and are having remote meetings where possible in order to save time that has been spent on travel in the past. Deal teams are also working more closely with ops teams pre-close to ensure returns can be made as soon as the deal is signed.  Additionally, some firms have been unafraid to forego deals in the current heated environment until multiples return to a more normal level.
  • Operating teams: Talent and human capital continues to be a significant focus (both internally and externally) with funds and their portfolio companies. That said, this year has been very difficult to attract, engage and retain talent—prompting more discipline with the process and an increased emphasis on branding.
  • Personal: Remote work has been a blessing and a curse for many—allowing for more flexibility for, for example, working parents, but creating challenges in getting up to speed, especially for more junior people who are meant to learn via the apprenticeship model.  It seems the primary lesson in 2021 is grace—having grace for other people and also yourself.  This time period is inarguably difficult with the number of changes and challenges it has presented, so give others and yourself a break when you can!

We thoroughly enjoyed getting to gather with other leading women in PE to discuss learnings and takeaways from yet another unprecedented year. If there is anything we can help you with as you finish out the race to year-end, 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 and we will be happy to help you right away.

Human Capital Forum Recap | October 2021

October 29, 2021 Kyle Johnson

Every quarter we bring together top PE HR and talent executives to discuss current industry topics and to offer leaders in PE Human Capital the chance to gather, share intel, and decompress with one another. In our most recent event, we discussed many topics and listed our top takeaways below. 

These forums follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow leading PE professionals during our next Human Capital Forum? RSVP for our next event on January 19th.

Employee engagement:  

  • Many firms continue to explore new ways to attract and retain talent – both internally and across portcos.  To keep a robust pipeline of potential portco execs, firms are trying various iterations of “Execs in Waiting” and are keeping them engaged via unique compensation models, board roles, happy hours, and ad-hoc advisory work—all for the purpose of keeping the relationship fresh.  On the internal fund side, many firms are trying to keep people connected with more programmatic content, i.e. sending firm cohorts on retreats to reconnect and gathering physically in a safe environment via service projects if offices are not yet open.  

Deal team engagement: 

  • The best practice for human capital leaders seems to be to offer directed help early in diligence, i.e. be specific with ways that Talent and Human Capital can serve as a resource throughout the diligence process but be careful not to be pulled into everything.  The Human Capital resource will then have a clearer view of work that needs to be done post-acquisition, and potentially get a head start on what needs to be done.   

Building Operations Teams and Senior Advisor Benches:  

  • Across BluWave’s 500+ client base, we have seen just as many iterations of senior advisor and ops teams.  That said, there seems to be a trend of building out functional expertise in some form or another that can then manage external resources or address the portco needs directly, with various scorecards or reporting methods to ensure they are not pulled too deeply into the portco daily activities.  There is a concerted effort to build out human capital capabilities across PE funds. 

We thoroughly enjoyed the fruitful conversations that occurred during this recent gathering of PE human capital professionals. As noted in our latest PE Insights Report, human capital remains one of the top initiatives in PE, with HR-related activities accounting for more than 50% of all value creation activities in Q3. If we can be of assistance during this busy time, please let us know.

Event Recap: PEI Ops Partner Forum: What makes a great PE talent partner?

October 26, 2021 Kyle Johnson

Last week, we had the pleasure of participating on the “what makes a great PE talent partner?” panel at the PEI Operating Partners Forum in New York. The panel was comprised of human capital leaders – including, Merche del Valle of Grain Management, Alice Mann of Blue Wolf Capital Partners, Ashley Day, a former Chief Talent Officer, and Michelle Nasir of Arsenal Capital Partners.

It was great to be in person with over 200 leading PE ops partners and to have a discussion with those that are talent-focused about what their jobs look like, now that talent operating partners make up 34% of all operating partners, versus the 3% that comprised the PEI ops partner forum 3 years ago.

We have seen the increase in human capital importance firsthand, with our proprietary data showing human capital initiatives increasing to 39% of PE activity this quarter compared to 17% in Q1 2018.

In addition to the increase of importance that has been placed on human capital initiatives in PE, data has shown that they have also become wide-ranging, covering everything from interim leadership to exec assessment diligence.

Given this context going into the panel on what makes a great PE talent partner, the below are some of the topline takeaways:

  • Talent roles vary widely across funds:
    • When talking to other panelists, we discovered that some of their talent roles are more internally focused on HR within the PE firm itself, and some are exclusively externally focused on portco executives only. It was also discovered that roles vary additionally by how and when they get involved.
  • Working with the deal team:
    • The panelists all agreed there have been changes in the amount of time available to fully execute on all of the responsibilities that may have fallen on talent in the past. They said that with this change, funds need to be more regimented and prioritized in terms of how and where they spend their talent team’s time.  In terms of executive assessments, interestingly—some assessments have become less comprehensive.  BUT, funds have also become more creative with deploying assessments given the tight market. Many are giving offers that are contingent on assessments and background checks going well.
    • For work with deal teams—the primary takeaway is that the earlier involvement, the better.  Roles amongst our panelists truly varied as to when they got tapped and for how comprehensive a remit, i.e. “do this assessment” vs “ride along on the deal execution to help us spot red flags.”
  • Pressurized market:
    • Funds have become more regimented due to Covid.  They have discovered efficiencies in the process that were developed during the times when everyone was remote and are now helping funds keep up in a highly pressurized market. These playbooks and scorecards have been developed for both internal hiring and monitoring the health of various portcos from a human capital perspective, i.e. turnover, depth of exec bench, etc.

If your firm needs human capital help, we can help make the job easier by connecting you with exact-fit interim executives, HR diligence providers, executive assessment providers, and more. Contact us here if we can be of help and check out our Interim CFO Hub to learn more about how interim executives can benefit you.

Women in PE Event Recap

September 17, 2021 Kyle Johnson

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 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 leading PE professionals during our next Women in PE Forum? Please contact us at events@bluwave.net.

Managing Limited Resources

  • Everyone is trying to manage with limited resources—too few people internally to address unprecedented deal flow, budgets to support the multiple initiatives, and accessing and deploying third parties.  Our panel shared that prioritization and communication are crucial—ensuring, for example, that everyone on a meeting invite is necessary.  To prevent burnout and retain team members, ensure everyone gets a break; as we all know, Zoom fatigue is real.  Some firms are deploying thoughtful staffing systems via CRM and Talent Officers to ensure that objectivity is being applied to staffing for deals.   

COVID Protocol Across Portfolio Companies

  • COVID has also presented challenges in divining unified COVID protocol across portfolio companies.  Our panel and attendees shared that one rigid approach is unrealistic—you can start with a common set of guidelines, but be open and flexible to accommodate differences in size, geography, and comfort levels.  Give employees visibility as to the plan and be prepared to pivot as circumstances change.   

Remotely Onboarding Platform Executives

  • Many firms in attendance had acquired new platforms and have onboarded execs for these platforms remotely.  How to best do this?  Many firms have used cognitive assessments not only for their traditional use but also to adjust onboarding plans to best suit individuals—extroverts with more “face-to-face” meetings, and introverts with more self-guided work.  Many have programmed in true socialization time, so execs can interact one-on-one with at least their direct reports and have small group gatherings with other relevant cohorts.  Some firms have also arranged introductions with execs in similar roles at other portcos to facilitate Q&A that execs may not feel comfortable asking the fund directly at the outset of their tenure. 

We thoroughly enjoyed getting to gather with other leading women in PE to discuss these current industry hot topics.  Here at BluWave, we are specialized to quickly connect you with the exact-fit, pre-vetted, PE-grade service providers you need exactly when you need them.

Never worked with us before? Check out our How To Vet BluWave video to learn more about us and how we can help. And if you have an immediate need, contact us here and we will be happy to help you right away.

PE Human Capital Event Recap

July 20, 2021 Kyle Johnson

Every quarter we bring together top PE HR and talent executives to discuss current industry topics and to offer leaders in PE Human Capital the chance to gather, share intel, and decompress with one another. In our most recent event, we discussed many topics and 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 leading PE professionals during our next Human Capital Forum? Please contact us at events@bluwave.net. 

Hiring Portco Execs   

  • Hiring the “perfect fit” executive for portcos is taking much longer, and many search firms and recruiters are tapped out.  Firms are getting more proactive—even engaging specialist recruiters before the deal closes.   
  • Many shared tips including focusing on the journey of a candidate—ensuring every interaction involves selling the value of your company and assessing the skill set of the candidate.  And when they find the right person, they are moving quickly.   

Attracting and retaining internal PE talent  

  • To find people (particularly at the senior associate and VP levels), funds are considering hiring off-cycle and considering non-traditional (non-banking) backgrounds, and committing to onboarding and training. Firms are offering mentorship opportunities with VPs or MDs and regular check-ins—proactively soliciting feedback from junior team members to unearth previously un-voiced concerns and providing them a “safe place” in which to do it.  
  • Many are leaning into the culture within the firm.  Branding has become even more important for both fundraising and attracting talent.   
  • Some firms are leaning into further defining career paths for juniors versus the historical opacity.  Junior talent will get poached if you are not clearly communicating how they stand within the fund.   

Lessons learned from hybrid and remote arrangements 

  • Hybrid flexibility varies by firm—some are full-time in-person, some are requiring in-person on certain days, others offering full hybrid with the expectation of in-person during a prescribed number of times per month.  Flexibility is the current perk du jour.  Try the best model for your office, and regularly reflect on whether it is working. It is ok to revisit your model and make changes if needed.   

We appreciated this latest session bringing together leaders in PE Human Capital, enabling peer-to-peer discussions on current industry hot topics. During our last quarter, Human Capital projects comprised 40% of our overall project mix, so we are well equipped and ready to help you with those needs. 

Interested in learning about how we can help you instantly access PE-grade specialized recruiters, organizational effectiveness advisors, compensation study providers, interim talent, and other custom fit human capital resources you may need? Check out our case studies here. If you have an immediate need, contact us here and one of our team members will be in touch shortly, we’ll be happy to help.

Women in PE Event Recap

June 18, 2021 Kyle Johnson

Every quarter we gather leading women in PE to discuss current industry topics and to offer smart women the chance to gather, share intel, 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 leading PE professionals during our next Women in PE Forum on September 15th? Please contact us at events@bluwave.net.

Deal Flow 

  • Panelists and table participants agreed that the current flow of deals is historic in number, but reflective of years past, particularly past-recession and pre-tax changes.  Funds are constrained by tight timelines and increased competition, higher price multiples, pressured budgets, and true scarcity both from diligence providers and internal fund capacity.
  • Funds have addressed this by focusing on deals they can win or where they have a unique angle for a seller. Some are even contacting banks in advance of the process with a pre-deal offering.  When a “wanted” deal is identified, funds are full-court-pressing management team (including in-person meetings) and putting resources against it.  Relationships with diligence providers have become more important than ever due to capacity constraints.  When go-tos are not available, funds are taking the opportunity to try new providers identified through BluWave—connecting funds with specialized groups for a certain industry or geography.
  • Internal capacity constraints are real, as is junior professional burnout.  Funds are leaning into the softer side (happy hours, team outings, etc.) to curate a sense of team and community, helping juniors feel tied to their firm and preventing turnover.

Holding Periods and Potential Tax Change Impact

  • Funds are trying to balance the opportunity to sell at significant multiples in this market, weighing the balance of higher short-term IRRs versus greater multiples of money with longer hold periods. Additionally, potential tax changes loom, encouraging companies to sell before the potential becomes a reality.  BluWave is hearing from our contacts in DC that a changed capital gains rate will likely land at a lower rate than being proposed by the administration in the form of a compromise.
  • Few PE firms seem to be making firm-wide changes from a holding period perspective due to the impact of potential tax changes.  That said, tax changes are pushing private owners (in an unprecedented way) to look at selling, amplified by the pent-up demand from the delayed covid period. Even 20-30 yr old industrials companies are considering sale for the first time.

Other Industry-Wide Observations

  • Travel:  Flights are packed, and travel is generally more “pleasant” from a hospitality perspective—hotels being genuinely eager to please!  That said, travel itself is more difficult due to limited flights, making the options more limited and forcing prioritization exercises.  Annual meetings are split between remaining virtual (higher turnout) and in-person (more collaboration/relationship-development). The consensus on board meetings is that they will likely be ½ virtual and ½ in person.
  • In-office:  Offices are coming back, depending on the region, though all will be in the “new normal” mode by Labor Day.  In general, most firms seem to be at least partially virtual for the foreseeable future, and there is a trend toward a more casual dress code—notably involving more color!

We thoroughly enjoyed getting to gather with other leading women in PE to discuss these current industry hot topics.  Here at BluWave, we are specialized to help you find service providers when your go-tos are at capacity.

Never worked with us before? Check out our How To Vet BluWave video to learn more about us and how we can help. And if you have an immediate need, contact us here and we will be happy to help you right away.

Private Equity Human Capital Executive Forum Event Recap

May 8, 2021 Kyle Johnson

Every quarter we gather top human capital executives across leading private equity funds to discuss key topics that are top of mind. In our most recent event, we covered many topics. Below are our top takeaways.

These events are invite-only and follow Chatham House Rules, so this only touches on our high-level learnings. If you are interested in joining our next event, please contact us at events@bluwave.net.

Return to Office: Though there was variance as to private equity funds approach how/if they will return to the office, Labor Day seems to be the flashpoint when most will begin their version of the “new normal.” In the meantime, office attendance seems to be voluntary, sometimes encouraged.

  • Some firms are using prolonged location flexibility as a recruiting tool for more junior employees, and others are trying a hybrid model, (all-firm Mondays, Deal Team A Tuesdays) to take advantage of the “organized serendipity” aspects of being physically in the same space.
  • Individuals are encouraged to share their “vaccine plan” but are generally not required to have it.
  • Questions arose around the attraction and retention of junior talent who prefer a flexible location plan—and how this may balance with the individual competitiveness in employees wanting to gain an advantage by being in person or preference with facetime.

Diversity, Equality, and Inclusion: Most firms are applying a more holistic approach when considering the diversity within the firm and portco structures, and some sort of diversity diligence and board reporting seems broadly applied.

  • Many firms are partnering with specialized recruiters or diversity-focused associations to maintain a diverse junior candidate pipeline.
  • To maintain a healthy pipeline of all junior candidates, some firms have introduced internship programs, or have made offers to investment banking candidates earlier in their careers.
  • A number of firms discussed using emerging public company standards for their portco boards.

Future of Work: There is broad acceptance that some things will likely remain different for the foreseeable future- either from a location flexibility perspective or a difference in frequency of business travel.

  • Firms are re-thinking what is required to be done in person (and in-office) and what can be done remotely in order to maximize time together.
  • Business travel will likely be less frequent in the near term (i.e. dial into the monthly board check-in) but more concentrated and purposeful when it happens (i.e. the portco visit will be bi-annually and will be an intense 3 days of plant tours and management meetings). Some firms are limiting travel to more senior individuals so as to reduce juniors’ time away from other essential tasks.
  • Many firms have targeted and continue to hone all employees’ digital acumen to optimize communication and collaboration across people and teams, regardless of whether they are in-person or virtual.
  • Virtual work has prompted a focus on the importance of personality assessment tools (like Hogan) to help team members understand each other better and to accelerate remote relationship building.

HR & talent are a key area of focus for us and our clients. In fact, in our Q1 2021 quarterly insights report, we found HR and talent remain private equity’s top area of focus, accounting for nearly 39% of all due diligence and value creation initiatives by PE in Q1 2021. Activity levels in HR and talent continue to grow over time, comparatively accounting for 32% of projects in Q1 2020 and 25% of projects in Q1 2019. Within this category, we are seeing significant investments by PE in ESG and Diversity, Equity, and Inclusion (DE&I) initiatives.

You can find an overview of our quarterly findings here. To view the full deck, which includes detailed projects by functional area, as well as league tables, reach out to us at info@bluwave.net. A team member would be happy to share our full findings with you and tailor our insights to be most relevant to you and your fund.