AlixPartners’ survey found that private equity and portfolio companies both rank management team alignment as top priority in the first 100 days, but they differ on most other priorities.
In the first 100 days after the close of a private equity deal, both the private equity investor and the portfolio company (“portco”) management team must establish and ensure that the portco CEO and CFO are aligned on strategy, goals, and key expectations according to a new survey by the global consulting firm AlixPartners and Vardis, the global private equity search firm.
While there was overall agreement on the importance of alignment, the AlixPartners-Vardis Fourth Annual Private Equity Leadership Survey found notable differences in responses about most of the other top priorities in the first 100 days. For the first time, “human capital” was ranked as the #2 concern with potential investors, second only to “growth.” Portcos ranked “assess the management team” second, but it was the sixth priority for PE firms which ranked validation of the investment thesis and delivery of quick wins as the second highest priority. While “analyze the company culture” was closer to the bottom of their priority lists, 50% of the portco respondents chose this one, versus only 19% of the PE firms.
About the Survey
The AlixPartners-Vardis Fourth Annual Private Equity Survey, conducted in conjunction with Vardis, the global private equity executive search firm, was administered October through December 2018. There were 158 total respondents comprised of 54 managing directors and operating partners from PE firms and 98 senior executives (primarily CEOs and CFOs) from portfolio companies. The largest share of portco respondents were with companies with annual revenues of $100 million to $500 million. The majority of PE firm respondents reported assets under management of less than $20 billion.