The formula for creating PE deal value is supposed to be fairly simple. But today the exits are coming from the CEOs, which is creating big problems. Our three-legged stool model was designed to avoid these challenges, drive value, and generate attractive exits for owners. Source: A New Formula for Creating PE Deal Value, Stability - Mainsheet OP
While an Operating Partner (OP) – usually with the credentials of a highly experienced CEO – is critically important to helping lower middle market private equity deal teams build value, the importance of an equally talented and proven interim CFO - otherwise known as the fractional CFO - cannot be overstated. With an experienced OP and CFO onboard, a deal stands a much better chance of achieving the acquisition thesis objectives, avoiding risk, identifying hidden value, and ultimately optimizing exit [...]
C-suite turnover is epidemic in lower middle market private equity (LMM) portfolio companies, a reality that, not surprisingly, can seriously damage or even derail the value creation process. The challenge - and its solution - is tied to the unique nature of these ventures and their corresponding need for CEOs and CFOs with the skillset and background to identify and manage the outliers - portfolio investments that stand out because of their particularly strong - or poor - performance. In [...]
[This post originally appeared in Mainsheet Operating Partners blog, found here.] A majority of the CEOs tasked with transforming PE portfolio companies into lucrative exits are instead being replaced within the first two years of the investment, thereby putting both the reality of those plans and their timetables in real jeopardy. Meaning that solving CEO turnover in PE companies is critical to industry success. That is the consensus of a recent PE industry survey, which also suggests that much of [...]