Forging Strategic Alliances: The Collaborative Efforts of PE Firms and Search Firms to Enhance Value
October 11, 2024 – In the rapidly evolving landscape of private equity, the interplay between private equity firms and search firms has transformed dramatically. No longer confined to a simple client-vendor relationship, these interactions have grown into strategic alliances that are essential for success in a highly competitive environment, executive recruiters tell Hunt Scanlon Media. As the demand for exceptional talent escalates, the need for a collaborative approach has become evident, shaping the future of talent acquisition and management within the industry.
This shift is underscored by the unique challenges that private equity firms face in their hiring processes. Unlike traditional corporate environments, where roles and responsibilities may remain static, private equity firms operate in a world that demands agility and quick adaptation. The dynamic nature of their business requires not just speed in filling roles but also precision in identifying candidates who can thrive in the ever-changing landscape of PE-backed companies. As a result, relationships with search firms have deepened, fostering a mutual understanding that goes well beyond transactional exchanges.
“Private equity firms have their own ways of working,” said Anthony Harling, founding partner at Harlschon. “They’re very results focused and demand much greater transparency in order to be able to influence the outcomes. PE firms have, therefore, sought to establish strong partnerships with those search firms that learnt how to adapt. These search firms have learnt to develop a much closer working relationship with the PE firm, sharing information at every stage of the search process, and being very responsive to the needs of their PE clients.”
“PE firms are not necessarily looking for the younger, high-potential talent,” Mr. Harling says. “They’re more likely to want someone who has done the job before, ideally with experience of working for a PE portfolio company, and someone who can clearly demonstrate evidence of their ability to deliver results in a demanding environment. Search firms have to understand the PE type and have to build up their networks of executives with a track record of success in this sort of environment.”
“PE firms value experience and track record above all else,” Mr. Harling says. “Age, therefore, is much less of an issue. In fact, the PE firm might well prefer an older, more experienced executive who has seen it all before and has the track record to prove it. Search firms, therefore, need to be more open to putting forward candidates who might not be so in demand when it comes to the big corporate clients.”
So, in what ways do you believe search firms can provide ongoing value to PE firms beyond just filling immediate hiring needs? “It’s about building a really strong relationship with the PE firm so that they can help with due diligence on the people side, being proactive and ready to present a suitable shortlist as soon as a deal is done,” Mr. Harling explains. “The search firms who know their PE clients really well will start to develop a strong network of executive talent who might be suitable in the future. It’s all about open communication and allowing the trusted search firm partner to engage directly with the portfolio companies as well as with the talent acquisition partners.”
Upcoming Webinar
In the dynamic world of PE, the relationship between PE firms and search firms has evolved far beyond the traditional client-vendor model. Join Mr. Harling this coming Tuesday for an interactive webinar supported by Hunt Scanlon Media. It will delve into how these partnerships have become strategic alliances, crucial to driving value in today’s competitive landscape.
Our panel of industry leaders—including Dan Hyde, partner at Erevena; Travis Hann, partner at Pender & Howe; Evan Sequeira, partner at TorQuest Partners; and Nick Kingma, principal at Hg—will provide exclusive insights into this evolving dynamic.
The discussion will explore how PE firms require a level of agility in hiring that is fundamentally different from traditional corporate environments. The need for speed and precision in talent acquisition has led to the formation of deep, loyal partnerships with search firms that go beyond typical transactional relationships. These strategic partnerships are built on differentiated approaches to talent assessment, recognizing that the criteria for leadership in PE-backed companies often differ from those in other sectors.
Moreover, the webinar will examine how some PE firms view search firms as integral extensions of their own talent networks, offering ongoing value through services such as interim management and talent pipeline flexibility. The ability to maintain strong ties with specialized search firms allows PE firms to build a robust talent pipeline, ready to support rapid operational changes, including leadership transitions and deal-driven hires.
There will be an opportunity for audience members to put their questions to panel members and join the conversation.
Free registration … Click here to sign up!
The Speakers
Anthony Harling is a founding partner of Harlschon Consulting, a specialist career transition firm helping senior executives and directors from around the world discover new challenges and opportunities in their late stage career. Prior to Harlschon, he had a successful 30-year career in international executive search, initially with Heidrick & Struggles in Germany and in the U.K., where he led the firm’s technology and professional services practices. Harling was also a co-founder of Archer Mann, a London-based boutique search firm. He speaks fluent German, passable French and Spanish.
Dan Hyde is a founding director of Erevena with over 20 years’ experience in executive search. He holds the position of CEO with day-to-day responsibility for setting the company’s strategy and building the team. In addition he oversees the management of client relationships across Erevena globally. Mr. Hyde’s heritage is working with technology companies and he has been responsible for appointing executive teams for some of the world’s fastest growing SaaS companies. He has worked across all sectors, with a particular focus on CEO, General Management, Chair, and NED roles within investor-backed companies. Mr. Hyde is an active investor in a number of early-stage technology ventures.
Travis Hann is the co-founder and managing partner at Pender & Howe Executive Search. Aside from his day-to-day operations of running the firm, his most recent search projects include successfully recruiting a CEO for a technology company backed by a global family office, facilitating the transition of a founder at a NASDAQ-listed business, and advising on a leadership expansion for a late-stage VC-backed unicorn entering the North American market from Asia. Additionally, Mr. Hann sits on the board of directors for Kestria.
Evan Sequeira is executive director at TorQuest. Prior to that, he led the development and fundraising efforts at Capitalize for Kids, children’s mental health non-profit, and previously worked at BMO Capital Markets where he was an analyst on the fixed income, currencies and commodities team. Mr. Sequeira serves on the leadership council at Capitalize for Kids.
Nick Kingma joined the portfolio talent team at Hg Capital in 2019 and is responsible for delivering C-level talent into the Hg portfolio as well as managing the firms industry advisor group. Prior to joining Hg, he spent six years with boutique executive search firm, Marble Hill Partners. Whilst with MHP he specialized in building management teams for UK mid-market PE portfolio businesses across various sectors. His early career was spent recruiting commercial and technical professionals within the TMT sector.
Attendance is free. To learn more and register to attend, click here!
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media