Most executives I meet in the corporate publicly-listed world when asked about private equity and whether they would consider the move, are always tempted and most are very eager to make the jump. The lack of public scrutiny and the large potential rewards on offer are cited as the main draws for listed executives. No doubt private equity can be very rewarding, however it usually comes at a cost and it’s not for everyone.
To give you some insights into the world of private equity in Australia, I sat down with three of Allura Partners’ more recent placements: a Chairman, a Partner and a Chief Executive. Namely, Peter Rodwell, Chairman of Pizza Hut Australia (owned by Allegro Funds), Don Grover, Operating Partner at The Growth Fund and Tim Hickey, Chief Executive at Affinity Education (owned by Anchorage Capital Partners).
When asked what they considered to be the biggest difference between their previous corporate careers and their current roles working for private equity, their responses included: “less charts and more grunt”. They also commented that the private equity board “is very close to the business and consistently works actively to partner and support the business and the leadership team”.
In regards to the potential rewards on offer when working for private equity, the main response was “equity pay off” and “reward structures that are linked to results”. Other incentives citied included: “the ability to truly impact and own the outcome” and working with a “close knit team with a focus on performance/results”.
As mentioned, private equity usually comes at a cost and it’s not for everyone, so when asked about the typical challenges they face working for private equity, the consistent message is that there is “little room for error”.
Finally, I asked the group what advice they would give an executive currently considering a transition from a corporate role to a career private equity and their responses were:
“if you love the security of your corporate role, don’t move; if it does not fulfil you, have a crack”
“ensure you’re aligned and a good cultural fit exists”
“do it sooner rather than later”
When I am engaged to recruit an executive for a private equity backed investment, no matter what the role or sector, my PE clients are always seeking executives with “great resilience and bundles of energy”. These characteristics generally ensure the executive drives the investment strategy through the troughs, overcoming all unforeseen hurdles to a successful implementation and exit.
If you are an executive currently considering a transition from corporate to a career in private equity, Allura Partners can assist. For a confidential conversation please contact Adrian Belle, Managing Director on +61 2 8821 7301 or visit www.allurapartners.com.au