PE VP Forum Recap | September 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 how VPs are putting plans and resources in place in the face of a recession as well as how different firms are recruiting and optimizing associate talent.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. If you are a private equity vice president and interested in joining fellow PE VPs during our next forum, you can register here.

Putting plans and resources in place in the face of a recession:

  • PE firms are looking inward at their portfolio to put together concrete gameplans that will help their portfolio companies not only survive but thrive as conditions change.
  • Gameplans vary depending on portco sectors and the stage of the hold period, but firms are ultimately looking for quick wins on their value creation roadmap.
  • PE firms are making strategic planning a priority with portcos.
  • Getting the right people in place remains a top priority. BluWave has seen this firsthand through clients’ increased need for organizational effectiveness groups & interim CFOs.
  • Add-ons are top of mind for PE firms, and they are staying prepared to pursue them if/when the opportunities arise.

Recruiting and optimizing associate talent:

  • Tight labor markets have made hiring PE associates difficult, so firms are shifting tactics to competitively recruit talent and implement training programs that will help them quickly become contributing investment professionals.
  • PE firms are starting to travel to meet candidates in their respective cities vs. relying on candidates to come to them.
  • PE firms are looking for innovative ways to accelerate and streamline the hiring cycle.
  • Some PE firms are experimenting with tapping non-traditional candidates outside of investment banking.

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

Learn more about how we can specifically help Deal Quarterbacks here.

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.

Listen to the podcast >>>

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.

Listen to the podcast >>>

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.

Watch the video >>>

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.

Read more >>>

 

 

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.

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:

 

PE VP Forum Recap | June 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 how scarcity and inflation are impacting human capital in PE as well as how firms are approaching finding opportunities in a choppy market. We’ve 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.

Scarcity and inflation impacting human capital: One of the unsung areas where inflation is impacting the economy the most is human capital.

  • Firms are taking a closer look at culture to increase retention and not just thinking about wages, but the total employee experience and related rewards.
  • Investments are being made in portco HR (CHROs, VPs, Directors) to collaborate with marketing functions on recruiting content to promote the benefits of an organization beyond dollars per hour. Portcos are also utilizing their current staff to recruit and network with candidates, such as incentivizing them with referral bonuses.
  • Another interesting concept is building in-house training programs to grow net-new talent pools instead of taking and losing employees to and from competitors.

Finding opportunities in a choppy deal market: The confluence of rising interest rates and geopolitical pressures are causing the deal market to become increasingly choppy. Firms are looking for ways to find opportunities in the face of risk and rising recession risk.

  • Teams are getting creative in deal sourcing by exploring new channels by moving down-market and supplementing with add-ons, focusing on proprietary or limited process situations, looking for failed auctions, and continuing to build new relationships.
  • It’s becoming increasingly necessary to be mindful of quality when selecting which deals to pursue and heightened diligence in underwriting, particularly when modeling downside scenarios. This has become even more important as we’ve seen multiples climb higher and higher over the past 12 months. Deal teams are adding extra layers of scrutiny to verify that businesses are valued at a level that will be appropriate over the coming foreseeable months.
  • Teams are spending significant time exploring targets’ operating leverage to understand performance in downside scenarios.
  • A number of firms are seeing an economic reset as an opportunity to find unique opportunities to potentially get quality assets at lower multiples, gain market share, and/or consolidate markets as weaker competitors seek safety and circle wagons.

We thoroughly enjoyed getting to gather with PE VPs to discuss these current industry hot topics. We’d be happy to connect you to the PE-grade, exact-fit, third-party resources you need to assist you in this pressurized 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.

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.

Read more >>>

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.

Watch the video >>>

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.

Watch the video >>>

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.

Listen to the podcast >>>

 

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

 

BluWave Team Interviews | Connor Mignone, Jr. Data Analyst

Every organization has its unique data, and we believe it’s what you do with that data that truly gives you a competitive advantage within your respective industry. Each business decision we make is driven by our data, collected from our 500+ PE firm clients. Gaining a birds-eye view of the market allows us to advise our clients on trends, insights, and proactive measures to support mutual success. We recently sat down with Connor Mignone, Junior Data Analyst, to hear a little bit more about his role and why he joined the team.

What made you interested in applying & why did you ultimately decide to join the BluWave team?

I have always been intrigued by the private equity industry and, after doing some research, was really excited about what BluWave was doing, and the direction it is headed. Seeing it was a high growth the company made it even more compelling to join.

What’s your favorite part about the team and culture?

Everyone is super friendly, there’s great communication among coworkers. It’s truly a supportive and positive environment.

What excites you most about the future of BluWave?

After hearing Sean, our Founder and CEO, talk about his plan and vision for BluWave’s future, I knew I wanted to help and use what I knew about data, models, and machine learning to help the company grow.

From a data perspective, BluWave is phenomenal with a large, clean data set, which puts us in a position to grow unburdened by common scaling challenges. BluWave has an exciting future with a lot of opportunity for machine learning.

Out of the BluWave Values of “Team, Value, Grow, Win”, what is an example of how you have seen these values play out in your time here?

BluWave’s growth plays the biggest role in my day-to-day. The pace at which we plan, implement, then plan to scale dashboards and other data visualizations, is unmatched.

What’s your background?

I received my Bachelors of Arts in Mathematics with a specialization in Actuarial Science from Central Connecticut State University, and most recently graduated with my Masters of Science from Vanderbilt’s Data Science program.

What has been your favorite part of your onboarding experience?

I feel very fortunate to have been able to work part-time at BluWave while I got my graduate degree. Management was more than accommodating. I thought the pace at which I was adjusted into the company was optimal.

The team-building activities like curling have also been super fun!

What’s your favorite part of the job and what do you find most rewarding about it?

The pace and variety. I get bored easily and love having things to do. Data is cross-departmental so one hour I might be working with marketing, the next might be with operations.

The most rewarding part of my job is receiving feedback. Whether it be positive or constructive criticism, it feels good to know my contributions are an important part of the company that the managers use to make decisions.

Now for the fun stuff, what are your favorite hobbies/activities outside of work?

I do Brazilian Jiu Jitsu at Nashville MMA. It’s a great workout and it quenches my competitive streak from being an ex-student-athlete. I try to go 5-6 days a week.

Favorite Nashville restaurant?

Sperry’s in Belle Meade

Favorite podcast?

The Lex Fridman Podcast

If you’re interested in joining the BluWave team, be sure to check out our open positions.

Event Recap: PEI Operating Partners Forum 2022

Last week, I had the pleasure of moderating  the “Unlocking the Transformative Due Diligence Imperative” panel at the PEI Operating Partners Forum in San Francisco. The panel included operating partner leaders Deborah Gallegos of Palladium Equity Partners, Drew Scielzo of ACON Investments, and Sheheryar Shah of ZT Corporate.

It was refreshing to be back in person with hundreds of PE ops partners to learn from their first-hand perspectives. Key takeaways included:

Executing value creation means that human capital remains a top priority for PE firms.

  • Ensuring the right management team and board leadership are in place allows for efficient execution against the value creation plan. Resource scarcity has had an immense impact on firms’ abilities to implement and execute plans. Industry leaders discussed tips for how PE firms can source and retain the right people at our recent human capital forum.

Leveraging technology to increase efficiencies is non-negotiable.

  • The aforementioned human capital challenges have tremendously accelerated digital transformation plans. PE firms are laser-focused on leveraging technology to increase efficiencies and reduce manual tasks to align with value creation plans. This allows portcos to reallocate resources to higher impact areas and rely on technology to solve for the monotonous, repeatable workflow.

Building trust with portcos’ management teams early on is essential.

  • Trusted partnerships between PE firms and their portfolio companies are vital to a successful investment. Building executive buy-in earlier on in the diligence process with a people-centric approach puts PE firms in a win-win situation. When the (right) management team has ownership in the decision-making process, this creates invaluable efficiencies between the PE firm and portco leadership teams.

If you’re interested in learning more about any of these, contact us here. You can also check out some of these resources:

BluWave Team Interviews | Justin Scott, Controller

The controller is an integral role in any organization. From optimizing accounting processes to strategic analysis of current processes to compliance, Justin Scott leads BluWave’s finance and accounting operations as Controller. We recently sat down with him to hear a little bit more about his role and why he joined the team.

How did you hear about BluWave and what made you interested in applying & then joining the team?

I first heard about BluWave through a recruiter and I agreed to allow them to submit my name based on the rapid growth of the company and the culture that was described.

What’s your favorite part about the team and culture?

The camaraderie and team effort to achieve goals was what sold me on accepting the offer, and seeing it happen every day is incredible.

Out of the BluWave Values of “Team, Value, Grow, Win”, what is an example of how you have seen these values play out in your time here?

The morning check-ins are a perfect example of true teamwork. When discussing opportunities, I often hear knowledge share, and folks offering to pitch in and help wherever they are needed.

What’s your background?

I’ve been in finance leadership for more than 20 years.

What’s your favorite part of the job and what do you find most rewarding about it?

My favorite part is organizing business processes, and adjusting the cadence for efficiency.

The most rewarding part of my job is helping others identify and achieve their career goals.

Now for the fun stuff, what are your favorite hobbies and activities when you aren’t in the office?

I enjoy reading, pencil drawing, and video games.

Favorite Nashville restaurant?

Monell’s at the Manor for breakfast!

Go-to vacation spot?

Las Vegas.

 

If you’re interested in joining the BluWave team, be sure to check out our open positions.

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!”