Private Eye: Sponsor hiring spree continues; focus on operations
David M. Toll
The Buyouts article, “Private Eye: Sponsor hiring spree continues; focus on operations," quoted Russell Reynolds Associates Consultant Heather Hammond about how private equity firms are building out their operations teams and recruiting from diverse talent pools. The article is excerpted below.
Many buyouts and growth equity firms added staff this year, taking advantage of a buoyant fundraising market to bulk up their operations, fundraising and credit teams.
The overall pace of industry hiring seems “modestly robust,” said Heather Hammond, managing director-financial services at executive recruiter Russell Reynolds Associates, as firms add mainly to their junior ranks.
Hammond said that “helping firm after firm build out their portfolio operations team” has been a big hiring theme this year. The firm’s private equity clients range in size from growth equity and middle-market firms to megashops. It tends to take assignments to hire investment professionals at the vice president level and higher. It also hires conducts searches for CFOs, CTOs and other administrative professionals.
In some cases, Hammond said, firms are hiring operating partners: typically former C-suite executives that pitch in on deal sourcing, due diligence and advising portfolio companies. Their time commitment ranges from serving as full-time partners to working as part-time contractors.
In other cases, firms are hiring executives that have expertise in a particular area of operations, such as supply-chain management, information technology or sales and marketing. Examples of their titles, according to Hammond, include VP of portfolio operations, VP of valuation creation or VP of the resources group.
Over time such executives may cycle into operational roles at the portfolio companies, or perhaps get promoted to operating partners. “They’re pretty dynamic roles,” said Hammond.
Russell Reynolds and Denali Group agreed that PE firms want to see a more diverse range of candidates for open positions, especially women and minorities, than they would have five years ago.
Hammond said pressure from public pensions and other institutional investors may have something to do with the trend. The private equity professionals that she’s asked why, however, point instead to the benefits of hiring people that bring different experiences, perspectives and connections to the task of finding and doing deals.
Said Hammond: “Every search we did [this year], including portfolio operations searches, had a component of diversity, and of stretching outside of private equity into other areas to look for talent we might bring in.”
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