PE firm needs IT due diligence provider to assess target company
A managing director came to us with a critical need for an IT due diligence provider to assess a target company in the manufacturing industry. The portfolio company was a multi-site signage company focused on design, project management, and manufacturing. The managing director needed a provider located in the southeast who could assess scalability and risk with industry-specific technology while also having excelled in prior work with PE firms.
BluWave identifies IT diligence provider with specific manufacturing knowledge
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade IT diligence needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of IT diligence providers that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with the select pre-vetted service provider from our invitation-only Intelligent Network that fit their exacting needs.
Firm uses diligence provider to properly evaluate target company
Within less than 24 hours of the initial scoping call, the PE firm was introduced to the exact fit, PE-grade diligence provider that specialized in assessing manufacturing-related technology. The client engaged the provider we presented them with and was able to confidently evaluate the target company and gain the insights they needed.
I get asked a lot of questions about how to build a business, and how to do it with as few headaches as possible. Not that I’ve totally figured it out, but I’ve certainly made my fair share of missteps and gratefully have learned something along the way. From investing, to hiring, to reducing headcount, to managing the ups and downs of an economic recovery period—one thing remains unchanged: leadership matters. And if you’re talking about key leadership positions, the one that companies most often get wrong is the CFO.
Why? Well, the answers are as varied as the reasons they fail, but it generally has to do with asking the right questions from the beginning. In other words, the interview process is often to blame.
I wrote an article for CFO Magazine about “hiring the right interim CFO” and how to ensure you set your company up for success when it comes to hiring one of the most important positions. Whether you are looking for an interim CFO (who can move into a full-time position) or looking for a full-time financial executive, here are some things you should know before you greenlight your new hire:
8 Things To Know Before Hiring An Interim CFO
If you are a PE-owned company and need to bring in a short-term finance chief, find someone who has worked for a PE-backed company before.
The interim executive needs to have a track record of wins. That generally means a significant tenure at multiple companies.
Find someone with industry experience, because it’s much easier to stand at the finance helm of a manufacturing, healthcare, IT, or services company if you’ve done it before.
Similarly, the interim CFO should have experience working for a company of similar size and scale.
It’s not enough to understand the numbers (sales, revenue, overhead) — you need someone who understands what the numbers mean.
For the best results, find a pro who has a high IQ and a high EQ (emotional intelligence), because the interim CFO needs to quickly gain favor from others in the organization to gather information and build a story around the numbers.
Be sure to have conversations with key stakeholders in a candidate’s prior roles. Choose the references; do not use the references the candidate gives.
While enthusiasm is a wonderful aspect of a new leader, a short-term executive should have a stabilizing effect, not a disruptive one.
For more details and to read the full article in CFO Magazine, click here.
As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE firm clients. In our most recent installment, Private Equity Consultant, Ryan Perkins, shares why the inflation-driven recession has caused firms to prioritize bringing in organizational design & effectiveness resources, and what types of those resources are being utilized the most.
Learn more by watching the video below.
Interested in connecting with interim CHROs, HR-focused consulting firms, or org design consultants? Contact us now to get quickly connected to the exact-fit, PE-grade resources you need.
Video transcript:
The inflation-driven economic downturn has created a complex environment, causing private equity firms to take unique action, balancing right-sizing before the storm with retaining and recruiting key personnel. With human capital being a strong input for ensuring success through this downturn, PE firms are bringing in specialized third-party resources to resolve organizational design and effectiveness needs. Here are a few specific resources that we’ve seen our clients engaging on.
Number one, Interim CHROs. Bringing in experienced interim CHROs with deep industry knowledge is a great way to ensure the human capital needs of your portcos are in steady, expert hands. An effective interim CHRO can steer the HR ship during a recession, ensuring your portco will have the right people in place to get through the downturn and position your portco for growth moving forward.
Number two, HR-focused consulting firms. Specialty firms are a great tool that private equity firms utilize to gain expertise on corporate structure and talent output, without adding personnel directly into a portco. Consulting firms that have experience working with private equity-backed companies can be extremely advantageous when making decisions around comp and benefits, staffing needs, restructuring projects, and expansion requirements during an economic slump.
And number three, organizational effectiveness consultants. Process optimization is essential to keeping up with the pace needed to thrive in times of uncertainty. Organizational effectiveness consultants ensure that processes within your portcos will help them run towards the storm by evaluating them as they currently exist, and suggest any required changes according to their industry expertise.
For private equity firms, uncertain economic times should be treated as times of opportunity. Ensuring the organizational design and effectiveness of your portfolio companies can be the difference between generating momentum versus treading water in a recession. At BluWave, we have the private equity-grade resources to position your portcos for growth, no matter the economic landscape. For information on how to get connected with best-in-class, organizational design and effectiveness groups, or any other third parties you may need, contact us today at info@BluWave.net.
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.
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.
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.
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.
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.
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.
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:
We’re sharing real-time trending topics we are hearing from our 500+ PE firm clients as we combat ongoing recessionary and inflationary pressures. One of our Private Equity Strategic Account Executives, Cydney Dicken, talks about why and how leading PE firms are taking action to increase their portfolio’s equity value during these uncertain times.
Learn more about what PE firms are doing as they prepare to run towards the storm by watching the video below.
Interested in addressing competitive opportunities, optimizing profitability, or recruiting and retaining the right talent? Contact us here. You can also learn more about the specific ways we drive value for PE firms by connecting them to the exact-fit resources they need by reading our case studies.
VP needs buyside M&A advisory firm in healthcare sector
A LMM VP was looking to complete a critical buyside search and came to us looking for the top buyside M&A advisory firm. Having already explored their investment thesis for the past nearly nine months on a healthcare practice, they were looking for an expert in this sector. Their criteria included specific, deep PE experience and a preferable Midwest location. Since the PE firm was just beginning to fundraise, they were looking to begin working with this resource within the next week.
Measuring against specific criteria, BluWave identifies exact-fit M&A advisory firm
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade buyside M&A needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of buyside M&A advisory firms that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with the select BluWave-vetted buyside M&A advisory firm from our invitation-only Business Builders’ Network that fit their exacting needs.
Firm engages with the PE-grade, industry specific provider
Within the same day of the request, the PE firm was introduced to a buyside M&A advisor firm that was an exact-fit service provider. Specializing in healthcare, this service provider had deep sector and PE experience. The client engaged with the provider and they were able to complete a market study on the target, in addition to advising the client on their investment thesis.
Firm comes to BluWave with executive recruiter need for portco
A D.C.-based LMM firm came to us with an executive recruiter need for one of their portfolio companies. This hospitality-focused portco had just acquired assets from one of its largest competitors and was moving into a larger warehouse. The firm urgently needed to place a CEO with deep distribution experience so that s/he could lead the business in implementing a new transportation system, re-branding the organization, and onboarding new employees from the recent acquisition. The firm had already executed an extensive search for an exact-fit CEO to run this $200M business and being 24 months away from an exit, the client was eager to identify candidates that matched their search criteria needs.
BluWave connects client with BluWave-vetted specialty executive recruiters
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade specialty executive recruiter needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of specialty executive recruiters that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with the select BluWave-vetted specialty executive recruiter from our invitation-only Intelligent Marketplace that fit their exacting needs.
Within the same day of the request, the PE firm was introduced to two exact-fit global providers that specialized in executive search. The client then selected their top choice and was able to begin working with a provider that was a 10 out of 10 fit. The agile provider was able to surpass the client’s expectations and placed a full-time CEO to lead the helm of the portco.
VP immediately needs a top interim executive for portco
A large cap VP came to us with an immediate need for a 3-month interim executive to set up a procurement office at one of their portfolio companies. Focused on healthcare technology, the portco didn’t have an existing procurement office. They were procuring technology from a variety of vendors and were ultimately looking to achieve a 10% savings opportunity with creating a procurement function. The firm was looking for the interim executive to set up quarterly business, inform potential cost optimization, and identify near-term wins and opportunities on this cost saving initiative.
BluWave identifies interim executive to fit exact criteria
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade interim executive needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of interim executives that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with the select BluWave-vetted candidates from our invitation-only Intelligent Marketplace that fit their exacting needs.
The firm connected with presented provider to start procurement initiatives immediately
Within a couple of days of the request, the PE firm was introduced to three exact-fit providers. The client then selected their top choice that had led five previous PE-backed procurement initiatives. The provider was able to start the project immediately, integrated the team right out of the gate, and started working towards the client’s objectives and setting up the procurement office.
