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PILOT Interim Management Placement Survey
While previous recessions have had a plethora of distressed deal opportunities, this recession has proven mysterious in terms of deal flow, as readers will find out in James Wheeler’s interview with
Alan Thomas, a stress equity investor specialist at Grant Thornton’s reorganisation and recovery practice. Interim placements often work in parallel with distressed and growth equity transactions,
which experienced a standstill in activity in the second half of 2008. But things are expected to slowly come around, however, no one can put their finger on why (yet a bit of luck, dedicated networking and an opening of the lending markets could be probable causes.)
According to our survey, since the third quarter of 2008, there has been a discernible trend for private equity in particular to seek to change non executives including chairmen. Important to note here is that many clients prefer to look for non-executive directors with special sectoral experience above all because they need to access talent quickly. Those surveyed said that they see the value in using interim networks where top quality skills are instantly available compared to their experience with traditional executive searches. They also were able to quantify results at a much more rapid pace, reflecting interims’ recognised ability to not only implement change, but to make things happen quickly.
More than 50% of placements in Q1 & Q2 2008 related to turnaround situations and major change projects as opposed to growth, for which CRO and CFO placements alone accounted for 55%. In Q3 and Q4, however, very few placements took place in non-turnaround/transformation situations. Furthermore, the total volumes of placements differed considerably – 67% occurring in the first half and 33% only in the second half. However, 2009 has started busily – at about the same level as Q1 in ’08.
Placements by Functional Discipline
CAPTION: Gov’t/Quangos/NFP account for between 30-40% of interim executive market; the above data covers the balance. Government will continue to be a major user of interims in 2009—the same in every recession--especially as NHS returns to use turnaround specialists once more, 2-3 years on from the last big change programme started by Patricia Hewitt (remember her?). This begs the question as to whether the last programme achieved its objectives. Local government and education are down to start major overhauls of their costs base and VFM delivery in 2009.
Interim executives placed during 2008 across all sectors, excluding Government and Not for Profit
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