Private Equity Still Cares About Career Stability

The following Wall Street Journal by Joann S. Lublin offers a premise that job-hopping executives no longer pay a penalty when interviewing for their next role.

I couldn’t disagree more with respect to private equity.  PE standards on this issue, as with most topics, are far more rigorous than the broader corporate world.

Keep in mind, the ideal private equity C-Suite hire is host of things, including a target runway of 8-10 years.  Specifically, private equity target leaders who will:

  1. Create tremendous value and absolutely deliver a winning exit (usually 3-5 years in the making);
  2. Be seen by the next investor (in the case of another financial buyer) as a cornerstone asset to the business and a reason to pay a premium.  This means the leader who remain with the portfolio company for the duration of the follow-on hold period.

Jumpy executives create too much risk in light of the above mandate.  How can someone who changes roles every 2-3 years be relied upon to stay for a minimum of 4-5 years…and ideally for up to 8-9 years (presuming a secondary buyout).

Too much stability?

Of course too much stability is also troublesome for private equity.  I see too many resumes where a leader has spent the first 2-3 decades of their career with one or two large companies.  These candidates are seen as high risk from an adaptability perspective.

The Ideal Private Equity Profile

There is no single ideal profile, however, our sponsor clients have a clear preference for the following:

  • Early career: 12-20 years of upwardly mobile experience in 2-4 large, blue-chip companies
  • Recent career: 5-10 years of experience made up of a series of 3-5 years stints at relatively smaller organizations wherein job changes are tied to exits, M&A or another winning milestone

About Rob Huxtable

Rob serves as the Managing Partner of Integis, a retained executive search firm with offices in New York, Cleveland and San Francisco that is exclusively focused on the private equity-backed, middle market.  The firm’s mission is to drive multiples of invested capital (MOIC) for private equity firms by recruiting high-impact portfolio company C-Suite leaders.  The firm has played a key part in helping many of its private equity clients achieve top-quartile and top-decile results.  Under Rob’s leadership, Integis has been recognized as one of America’s fastest growing privately held companies by the Inc. 5000 for 2015 and 2016.

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