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CEO Executive Search Firm | Cowen Partners

Qualities of a Private Equity CEO

CEO turnover within private equity firms is shockingly high. According to a 2017 survey by AlixPartners, as many as 58 percent of private equity CEOs are replaced within the first two years of acquisition. Switching CEOs after two years can be detrimental to a PE firm’s return on investment given that most PE acquisitions are only held for five to seven years. Attempting to introduce new leadership in the middle of a PE investment life cycle can be damaging to the company’s success and ultimately the profitability of the company.

PE firms often experience high turnover because the CEOs hired or brought on during an acquisition do not meet the firm’s expectations. It is difficult to select the right CEO candidate for a private equity or venture backed company. Most candidates come from impressive backgrounds and have the first-hand experience that initially makes them seem like a good fit. However, if you really want to make sure you’re bringing on the right person to manage your investment look for a candidate who has the below qualities of a successful private equity CEO.

Must be a team player

CEOs need to be able to create a high-performing team, and a big part of that includes being a team player. Arrogant, self-involved leaders do not fare well in PE firms because they have a hard time motivating people to strive for the company’s goals. In some cases, an overbearing leader can even drive away top talent from the company.

A private equity CEO should be able to empower direct reports and make sure everyone is on the same page when working toward company goals. This means a CEO is willing to delegate tasks to the team without micromanaging the process. A strong leader also knows how to promote talent development. Key jobs within the firm can be improved through skill development and training. A team player is more equipped to notice areas of improvement because they’ll be more familiar with the department duties and be more willing to listen to concerns from those under them.

A few warning signs that indicate a candidate might not be the best team player include arrogant behavior and using “I” too much. If a CEO candidate is talking about past accomplishments and not giving any credit to his/her previous team, it’s an early warning sign that the person isn’t a team player. The number of colleagues a candidate can pull into their current venture also speaks volumes. If people who previously worked with the CEO want to stay on his/her team, that’s always a good sign.

Has to be resilient

PE firms are bound to face a few setbacks and roadblocks when turning around a company. The CEO needs to be able to face these challenges and take them in stride. A candidate who can give examples of overcoming past errors and setbacks is able to demonstrate their resilience. A firm can have confidence in a CEO who knows how to take a negative result and work toward a solution.

You should be skeptical of candidates who have skated from success after success, or who at least try to make it seem that way. A CEO candidate who can talk about setbacks and how they overcame problems will give you a glimpse into how that CEO can adapt and work for your firm.

Effective communication skills

A CEO needs to have excellent communication skills to succeed. Open, straightforward communication can motivate team members and ensure everyone is on-target to reach company goals. It’s also imperative the CEO knows how to effectively communicate with other PE executives. Some CEOs do an excellent job managing their teams but struggle to convey information and needs to investors. In other circumstances, the opposite is true. The CEO works well with PE investors, but struggles to create a team environment within the company. A good CEO should be able to demonstrate an ability to communicate across all levels of management.

When selecting a private equity CEO, executive recruiters also really pay attention to how a candidate will fit in with the PE house culture. PE executives don’t realize how important culture fit is when hiring a CEO for one of their portfolio companies. Executives have to take the culture into consideration for a number of reasons. If the current culture has been doing well for the company then sticking with the current CEO could be beneficial, but if the culture needs to be altered to produce the desired results then looking into other candidates is best. A clear understanding of the culture shifts that need to happen for the company to reach its full potential will help you make the right choice when selecting a private equity CEO.

Choosing the right CEO for a portfolio company can make the difference between a profitable exit and stagnation. A CEO who demonstrates strong collaboration, resilience, and communication qualities will ensure your private equity investment is in good hands.

Cowen Partners Executive Search

Cowen Partners is a national executive search and consulting firm. Our clients are both small and large, publicly traded, private, and non-profit organizations.

With our proven processes and guaranteed results, we have successfully placed hundreds of candidates in industries including technology, commercial real estate, healthcare, financial services, sales and finance.

Contact us if you need help identifying a qualified CEO for your portfolio company.

 

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Private Equity Operating Partner Job Description

Operating Partner Job Summary

The Operating Partner (OP) will work closely with the Board of Directors and investors to position companies for growth, identify acquisitions and work through cross synergy opportunities with other portfolio companies. They will also drive office expansion and recruiting, onboarding, and development strategies of other senior management and leadership. They will work with CEOs with strategic oversight and execution of key strategic initiatives and KPIs.

Operating Partner Job Description

Provide overall strategy and vision for portfolio companies over both the near  term and the long term, more specifically:

  • Work with CEOs on staffing strategies for established offices and expansion locations.
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  • Manage full life cycle recruitment process and onboarding of Senior level executives and a new Chief Revenue Officers and Chief Sales Officers for two platforms.
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  • Provide leadership in planning, forecasting, and due diligence to support the company growth and regional expansion objectives. Develop multi-year business scenarios to establish a planning foundation to assist senior level management in providing the structural needs for office systems and human capital support.
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  • Assist the investors in identifying, prioritizing, and executing the key strategic initiatives across the business plans. Develop strategic direction and growth initiatives in a format that clearly outlines ROI for the sponsors approval.
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  • Map out industry landscapes, develop a plan for partial growth through acquisitions and execute accordingly.
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  • Strategically lead mapping revenue projections, budget forecasts, and production expense management.
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  • Ensure that other companies within PE portfolio are collaborating and communicating across our portfolio of strategic initiatives, making sure that the right team members are included to ensure successful delivery of synergies.
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  • Work with senior leaders to assess and develop their growth potential, effectiveness and performance. Partner with the individual strategic leaders of each business line to establish unit realistic performance objectives, training, education, coaching and mentoring.
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  • Contribute to innovation efforts to continue to expand revenue opportunities and increase profitability across all platform investments.
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  • Assist with growth initiatives to include more acquisitions and partnership identification strategies. Identify, research, and develop new opportunities/business ventures that fall within and outside of existing lines of business.
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  • Identify and supervise human capital resources to leverage existing team to generate additional revenue.
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  • Drive a continuous improvement mindset through the company culture.
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  • Protect the confidentiality of information learned by developing protocols.
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  • Comply with and outwardly support both the company and PE sponsors policies and procedure.

Requirements

  • Bachelor’s degree or equivalent experience required. Master of Business Administration (or commensurate experience) preferred.
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  • 10+ years of previous operational leadership experience.
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  • 5+ years managing direct and/or indirect reports. Regional leadership and oversight experience preferred.
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  • Deep operations knowledge in resource planning, demand planning, business planning, corporate strategy, communications, leadership, benchmarking, and forecasting required.
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  • Market research, analytical, financial modeling, metrics, and presentation skills required.
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  • Strong proficiency in the use of Microsoft Word, Excel, and Outlook required.
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  • Organizational and time management skills to prioritize workloads to meet time sensitive deadlines required. Must be results-oriented with the ability to change priorities as needed.
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  • Must have strong verbal, written, and interpersonal communication skills to interact with all associates, with the ability to communicate with tact and diplomacy.
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  • Demonstrated ability to protect confidential information.
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  • Ability to travel by automobile and aircraft and be away from home for more than one day and night.
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  • Manage external relations to identify, diversify, build and maintain relationships with community and surrounding cities organizations and leaders to secure a range of support and partnerships.
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  • Manage solicitations with board members and sponsors, and providing outcome reports. Lead cultivation and stewardship activities for charitable endeavors.

 

Qualifications

  • Bachelor’s degree
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  • 5+ years senior-level management experience including managing large teams
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  • Ability to develop and execute short and long-term strategic plans; ability to develop and maintain external relations with a wide range of stakeholders and partners
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  • Proficiency in software applications including Word, Excel, Outlook. CRMs
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  • Valid driver’s license
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  • Pass a background check

 

Benefits, Culture, Etc

We are an equal opportunity employer and all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, disability status, protected veteran status, or any other characteristic protected by law.

 

Cowen Partners Executive Search

 

Cowen Partners is the nation’s executive search firm, enabling companies to harness the power of human capital to fuel their success. Cowen Partners gives our clients access to the top 1% of human capital to create opportunities that accelerate their growth and market share. With Cowen Partners, clients can grow at scale, create value, and drive results with world class talent.

 

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