Private Equity Portfolio
Private Equity Portfolio
How Private Equity Portfolio Firms Can Succeed
The economic downturn and the financial collapse of this year have left many private equity firms struggling to produce returns from their portfolio companies. The executive management of these firms have an important role in the company’s survival by providing clear leadership and sound strategy in unsettling times.
Mark Rittmanic is the founder of ForteCEO, a leading senior interim executive firm for private businesses in the United States. He offers private equity portfolio firms and other private businesses the opportunity to work with ForteCEO’s executives–all of which have at least 20 years experience leading successful businesses–to exploit profitable areas and overcome obstacles. Mr. Rittmanic offers his thoughts on how private equity portfolio firms can survive in a challenging economy here.
“Four Survival Tips for Struggling Private Equity Portfolio Firms”
1 Immediate Renewal Leadership: A challenging economy can be a blessing when you see and react to issues that were not revealed when the tide was high, especially leaders who are not able to adapt. If you have a struggling leader with a “deer in the headlights” reaction to the business downturn, you need to take decisive action and bring in overqualified leadership to steer the ship through the storm. Since you need this assistance right now, and likely will not need this level of leadership long term, consider an interim CEO to work with the current team and help them succeed.
2 Demand Industry Expertise: Many PE firms have operational partners as a first line of defense for portfolio assistance. A prolonged downturn, which certain industries are currently facing, is no time for on the job training in a new industry. If your operating bench is light on the right industry experience, consider ForteCEO’s operating executives who have led business renewals in more than 30 industry sectors.
3 Don’t Assume We Have Seen the Worst: We are preparing clients in certain industries to survive 2009 with 30 to 40% lower annual revenues. At first blush, this seems impossible, and it may be with your current leadership. But taking a focused, zero-based approach with people, clients, operating expenses, product SKU’s and service offerings usually results in a dramatically different view of what is necessary for survival. It just takes a leader who has done it before.
4 Get Everyone Involved: In the middle market, most great companies are based on getting extraordinary accomplishments from ordinary people. This is never truer than when the firm is under fire. Take advantage of times like these to galvanize your team around the goal of survival, which may include pay cuts and other sacrifices for all parties until you are out of the woods. Don’t shield your people, landlords, vendors or other key constituents from your challenges. Make them part of the renewal effort.
By Mark Rittmanic, Founder of ForteCEO
Tags: Private Equity Portfolio, Private Equity Portfolio Firms, Private Firms, CEOs, ForteCEO, Private Equity Owned Companies, Private Firms, Private Businesses, Tips for Private Equity Portfolio Firms
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Tags: CEOs, ForteCEO, Private Businesses, Private Equity Owned Companies, Private Equity Portfolio, Private Equity Portfolio Firms, Private Firms, Tips for Private Equity Portfolio Firms
