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Welcome to the June issue of Pilot's Log
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 If you have ever spent countless meetings convincing others of the benefits of your sector and services, then you will know where I am coming from. Much like the private equity industry, interim executive placement firms have also gone through their share of education exercises. But unfortunately, private equity tends to do all the explaining. Ninety per cent of all private equity firms have to educate the placement firms with information that we at PILOTpartners already understand. For that very reason, we have taken that time constraint out of our client meetings by specialising in introducing candidates that have already worked for private equity backed businesses.
Different ways of looking at interim management
In addition to traditional uses of interim executives (e.g. FDs or CEOs who go into situations for 6-12 months) there are several others which continue to account for more and more of our specialised business mix.
The Lone Wolf
Among the interim executives most in demand at the moment are independent turnaround, restructuring, and change management specialists. While some PE houses prefer to use turnaround boutiques, many others prefer to use sole operators, or ‘lone wolves’ if you will. These are very senior and very experienced professionals who are adept at positively impacting the fortunes of portfolio businesses, either using a soft touch to tweak operations, or a heavy hand if the business is well off plan, or to manage a full on financial restructuring. Have a look at Mark Taylor’s opinion piece in this edition of Pilot’s Log.
Interims as NEDs
Another area in which we are increasingly being asked to help is the sourcing of non-executive directors. Our most senior independent executives, particularly those who have already gone ‘plural’, make very compelling candidates to round out portfolio company boards. It is no surprise that a quick way to add some stability to a company is by adding a very seasoned and steady handed non-exec.
Known to us are numerous former ‘captains of industry’, ex-CEOs and ex-Chairman who have spent a long time within specific sectors, have been through one (or more) previous recessions, and generally are familiar with private equity. It has been an especially notable feature of our work over the past few months that portfolio businesses of about two years post investment are replacing non executive chairmen who have not successfully managed the board through lack of focus or agility when confronted by a rapidly changing business environment. Sometimes they are lone wolves…
Instant Due Diligence
Lastly, senior independent executives can fill the information gap between a private equity firm’s desktop analysis (and in-house expertise) and the retention of (expensive) specialty advisory firms. Specifically, executives with significant sector experience can quickly educate a firm as to the pitfalls within an industry, which companies have untapped potential, and what the technological and economic issues/challenges the industry and players will face. Many times after these types of due diligence projects, a firm may ask the executive to stay on in some capacity, either as a chairman or non-executive director.
My best wishes
Michael Gebauer – Private Equity Partner
T; 07834 235 458
E: m.gebauer@pilotpartners.eu
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