NEWS / BLOG
Occasional thoughts, news, research, and financial best practices as they relate to building value in lower middle market PE portfolios.
With the first quarter complete, most companies with a calendar year end have wrapped up their annual financial audits or are in the process of doing so. For all those accounting teams [...]
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 valu [...]
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 d [...]
A recent survey of 100 PE firm partners and portfolio company CEOs conducted by a partnership of Vardis and AlixPartners revealed that CEO turnover occurs during the hold period in 73% of PE deals. Based on my 13 years of working with lower middle market (LMM) PE portfolio companies, I would say 73% figure is too conservative in the LMM.
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.
We are always happy to discuss a particular challenge and determine whether there’s a fit.