9 Takeaways from Raines’ Private Equity Webinar
Raines Managing Directors Patrick Gray and Mercedes LeGrand co-hosted a fantastic webinar March 17 on Transitioning to Private Equity.
The discussion, featuring Larry Prior of The Carlyle Group, Alicia Sontag of Prelude Growth Partners, and Neel Bhatia of Arcline Investment Management, looked at panelists’ journeys to their current PE roles, misconceptions about PE, and advice for how to be successful after transitioning to PE.
During live polling, 66% of attendees shared that their biggest challenge in transitioning is their lack of relationships with PE firms. To this, panelists advised connecting with executive search firms like Raines and PE firms directly. In addition, be sure to understand where you add value, where you can offer expertise, and how your dream PE firm operates.
See nine key takeaways from the 45-minute webinar below. You can also watch the webinar recording at the bottom of the article.
1) Not all PE firms are the same. The more time you can spend getting to know a firm and learning its business, the better. Part of the reason Larry’s transition to The Carlyle Group was seamless was because he had relationships with firm members for 20 years, so he wasn’t surprised about the dynamics once in the role.
2) Get to know not only the firm, but the team with which you would work. “There can be a tendency to just jump in,” Neel noted. Instead, “be very thoughtful about not only the firm but the person within the firm. If you’re a Private Equity executive, you’re primarily working with one or two deal partners, maybe some operating partners,” so really get to know your future team.
3) Think like an owner: “In PE, as an executive, you can’t think about it as an employee,” Alicia said. “You have to think about it like an owner because that’s how the PE firm is thinking about it, and that’s how the founders and managers are thinking about it.” Alicia said often this is the hardest mindshift for leaders new to Private Equity.
4) Be coachable. Neel identified two common profiles of PE executives — an experienced PE executive, who has a playbook for operating, and a novice. If the person is new to the PE world, PE firms look for someone who can quickly adjust and importantly, is coachable either by outside coaches, the board, or other leaders in the company.
5) Think faster: While the plurality of holding times for a PE firm is 3 to 5 years, your action plan for results is in terms of months and quarters. “When you make the move from publicly traded to Private Equity, try to understand and be comfortable with these couple of different gears, with both the long-term strategic focus but also the intensity of putting it in play almost daily,” Larry recommended.
6) Connect with specificity: Alicia says she receives warm and cold calls frequently. “We really appreciate building those relationships because the timing might not be right now but it could be 6 months or a year, or it could be right now coincidentally.” But, when you do connect with a PE firm about a position, the more specificity you can provide about your skill sets, the better. And, be sure the firm invests in your industry. Case in point: Say you are a great supply chain leader for industrials, don’t say everything you can do — pick two or three key strengths and emphasize them. “It’s all about strategy, but it’s also all about A+ talent,” Alicia notes.
7) Are you the pig or the chicken? To get the big return on investment, you must be committed. “Are you the pig or the chicken at breakfast?” Larry asks. “How committed are you, and have you invested alongside that PE firm, both from the fund and through direct investment in the opportunity? If you’ve made that commitment, it can be very rewarding but it has a time horizon measured in 3-7 years, and you have to have patience for that kind of return. More importantly, you have to make it happen.”
8) Be introspective. Both Alicia and Neel flagged an individual’s self-reflection and assessment of strengths and weaknesses to be key in finding success in PE. Leaders must be willing to listen and be held accountable.
9) The best idea wins. “Whether it’s an associate, a vice president, a managing director, if you have an idea, your voice is heard and the best idea wins,” Larry has found. To that end, if you have great relationships, and you are both showing up and speaking up within the industry, you will position yourself well to be on PE firms’ radar.