December 20, 2018 – No client sector demands such top-end service from its search partners as private equity. Portfolio companies represent some of the most innovative, well-funded and high-growth concerns in all of business. As a result, much of the talent that private equity firms seek are highly-charged change agents — a professional breed that is growing more difficult to recruit.
With 2018 moving toward its close, Hunt Scanlon Media looked back through our archives and revisited an impressive collection of stories about an industry that is both thriving ($1.14 trillion in dry powder) and looking at significant challenges (climbing interest rates) in the months ahead. It only makes sense that recruitment firms would have played an intricate part in private equity’s narrative throughout the past year.
Picking the five top private equity stories out of an array of spellbinders was no small task, but we ultimately made our selections.
For starters, this year we gave readers a glimpse into our own report that warned of a growing bidding war for top talent and how PE firms can best answer the call to battle. We also brought readers inside the expansion of London-based TritonExec’s private equity practice in the U.S. And just earlier this week when ZRG Partners welcomed a new investor in private equity firm RFE Investment Partners, we jumped on that story as well. Few readers, meanwhile, missed our piece about the $1.1 billion acquisition of Alexander Mann Solutions in London by OMERS Private Equity, the PE arm of Ontario-based OMERS. And the recent launch of CXO Source, a Texas firm that finds finance and operations leaders for private equity companies and their portfolio companies, is nothing less than a sign of the times, and of things to come.
Here are our choices of the top PE recruiting stories of 2018, each of them a look into the recent past with an eye to the future:
According to a coming research report from Hunt Scanlon Media, the private equity sector can expect to see an expanding bidding war for top talent. Driving the trend: persistent global talent shortages across the C-suite. Nearly every industry and function is affected, including finance, healthcare and biotech, digital and technology, among others. “Leadership is the new bottom line for private equity operating executives seeking top talent for their portfolio businesses,” said Scott A. Scanlon, the firm’s founding chairman and CEO. “The PE sector is in the crosshairs of a widening war for leadership.” To help find solutions to the growing talent problem, Hunt Scanlon is convening 300 private equity leaders, chief talent officers and executive recruiters next spring to further explore the topic of ‘Private Equity Recruiting: Linking Talent to Value.’
Aside from the big-branded executive recruiters, all of whom devote significant time and manpower to talent acquisition initiatives throughout the PE space, a number boutique search firms are working alongside these investment brands to provide talent up and down the functional scale. And much of the activity is taking place on American shores. Following that demand, London-headquartered executive search firm TritonExec expanded its private equity practice into the U.S. by opening new offices in Atlanta and New York. The U.S. expansion will be led by partner Abe Doctor. The firm noted that its private equity practice has been the fastest growing segment of TritonExec’s business. “The $12 million turnover business, which is focused on digital and professional services and private equity, is also expanding its global headcount from the current team of 25 to 40 over the next year,” the firm said.
ZRG Partners, one of the fastest growing global boutique executive search firms, will soon announce the completion of a recapitalization with RFE Investment Partners, a lower middle-market private equity firm with a long history of investing in growth companies. Rochelle Park, NJ-based ZRG’s current capital partner, Northcreek Mezzanine, is exiting the investment after four years. During this period, ZRG experienced a compound annual growth rate exceeding 38 percent and nearly doubled its number of offices from 13 to 22 around the world. “We are excited about the next chapters of growth for ZRG as we continue our ascent to becoming an even more significant player in the global executive search market and broadening our offering to other areas of human capital services,” said ZRG CEO Larry Hartmann. “Our data-driven approach to human capital and our commitment to delivering seamless services around the globe with our highly collaborative team have been pillars in our growth strategy.”
OMERS Private Equity, the private equity investment arm of Ontario-headquartered OMERS, has entered into an agreement with New Mountain Capital to acquire Alexander Mann Solutions, a London-based talent acquisition and management services firm, for $1.1 billion. Alexander Mann Solutions has industry expertise in a number of sectors, specifically retail and financial services; investment banking and professional services; technology and media; defense, engineering and business services; energy; and healthcare and life sciences. The company helps clients, typically large international businesses, to recruit and retain talent through multi-year contracts. Its small army of 4,000 talent acquisition and management experts deliver solutions in partnership with over 100 clients across 85 countries. Alexander Mann is led by founder and CEO Rosaleen Blair.
The private equity sector is hot for talent and that demand has led to a growing number of recruitment firms that specialize in the sector opening for business, and creating or expanding their specializations in recent months. CXO Source, a professional services firm focused on finding finance and operations executives for private equity groups and their portfolio companies, is the latest to launch in Dallas. The firm brings together a team of executive search professionals who have deep experience working within the sector and placing hundreds of C-level executives over the years, according to the firm. “Hiring top executives to lead a portfolio company through the growth stages in a private equity environment is a unique challenge, one upon which our team is exclusively focused,” said Louise King, co-founder and managing partner.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media