May 10, 2014 – The private equity sector is booming. With $250 billion from investors looking to deploy capital the private equity field is ready to explode with new deals – and in the process it is likely to continue as one of the most fertile hunting grounds for executive recruiters looking for new business. Coming onto the stage in the late 1990s, private equity firms have been involved in some of the most notable business deals of the last two decades, including the acquisitions of Toys “R” Us, Hertz, MGM and Sun Guard. Despite a downtick in the private equity sector in 2007, caused primarily by turmoil in global mortgage markets, the industry has rebounded with zeal.
As a result, private equity firms like TPG Capital, The Blackstone Group, Goldman Sachs and Bain are on the prowl for talent in the form of senior level professionals who can lead a wide-range of companies that make up their portfolios. They are increasingly turning to search firms which specialize in private equity and venture capital, to identify the best and brightest C-level class of executives to fill their key leadership roles.
No Red Tape
JM Search has carved out a substantial niche in this market and is one of several top recruiters to lead the charge in talent acquisition for private equity clients. Founded in 1980 as a generalist recruiter, JM Search moved into private equity search in the late 1990s when the sector was in its infancy. “I instantly liked the model of private equity,” said John Marshall, the firm’s CEO and founder. “There is not a lot of red tape or bureaucracy that you can sometimes find in assignments for traditional companies. It is a very transparent, black and white situation where a private equity client wants a CEO or other senior executive and it moves very quickly from there,” he added.
C-Level Talent Scarcest Commodity
Mr. Marshall said that whether economic conditions in the general business field are good or not so favorable, filling the talent pipeline for private equity portfolio companies is always active. “If our client has a distressed company in its portfolio they will need to make a change at the top. If the economy is robust we might see a portfolio company that is growing fast and needs top grade talent for the next phase of its growth,” Mr. Marshall added. Pro football Hall of Fame quarterback, Steve Young, now a managing partner with Huntsman Gay Global Capital, a private equity firm based in Palo Alto, CA, said he looks for all sorts of talent for his firm’s portfolio companies. “The answer is that our needs are truly varied,” said Mr. Young. “But in the end it’s C-level leadership that is the scarcest commodity.”
JM Search, which is based in Philadelphia with offices in New York and Chicago, conducted over 135 private equity assignments in 2013 for clients like Littlejohn & Co. and Oaktree Capital, among others. Twelve partners are dedicated to this practice sector. The firm works for an array of clients in consumer products, industrial, manufacturing, technology, distribution and media. “Eighty percent of our search assignments are instances where we are asked to find a CEO or CFO to replace a founder or owner who might not be positioned to lead the company through its next growth cycle,” he said.
Recently JM Search recruited both the CEO and CFO of CIT Foods, one of Littlejohn & Co’s portfolio companies. CIT Foods was subsequently sold to TH Lee and Goldman Sachs. For Oaktree Capital, the firm recruited the CFO and COO for Mark 4, an automotive supply company as well as the CEO for home and hardware products company, Howard Berger Company. “We will continue to expand with a mission to increase the shareholder value of our private equity clients,” Mr. Marshall said.