Private Equity Minting New CEOs

As private equity (PE) deals continue to increase, more executives are stepping

into the role of the CEO as founders’ cash in on their business. The newly minted

portfolio CEOs have managing both roles of changing the culture of the firm,

making more efficient and also managing the return expectations of the PE firm.

One PE firm stated in a McKinsey article that they are only looking for CEO with a

owner’s mindset: “In short, we are constantly looking for the CEO with an

ownership mentality,” said one PE-firm executive in Asia. In the interview process,

these executive hopes “they will ask, ‘What is your underwriting base case and

expected holding period? How much value do you expect to generate?’”

PE firms offer their leaders, including operations teams, functional experts, senior

advisers, trusted confidants, and a network of other CEOs within their holdings.

The ability to derive benefit from these allies is a key leadership strength. A PE

board will be engaged in a more intense, hands-on way than any board you have

encountered previously. An essential part of your job is to build a good

relationship with each board member and shape your license to operate.