Considering a change to private equity ownership?
Abstract
There are clear attractions of private equity for executive teams including financial rewards and managerial freedom. However, these benefits are associated with significant risks for management teams:
- PE firms frequently replace senior management before a purchase or during ownership
- 59% of PE firms blame failure to meet targets on “poor management performance”
- 35% of PE firms have replaced management teams in >40% of portfolio companies
Even if you keep your job, you could still lose your house: management will have (and be expected to have) a stake in the business that “only just lets them sleep at night”.
What does a Private Equity backed Management team need to do? This article outlines 7 common themes that underpin successful outcomes.
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