Spotlight: Delivering Exceptional Talent to Private Equity

June 5, 2023 – Smooch Repovich Rosenberg is the founder and CEO of Smooch Unplugged. She brings strategic investor relations officer search consulting focus to the PE arena as a means to helping firms realize their portfolio company valuations as these entities contemplate entering the public markets. Her 30-plus year collaborating with pre-IPO companies across industry sectors is one of the most unique search consulting strategies in the marketplace. Working with PE firms’ portfolio companies and other pre-IPO companies across North America, Europe, and Asia has been a brand enhancer for her as an expert in the capital markets and the deep and broad investor relations officer search work she and her team conduct.

Ms. Repovich Rosenberg recently sat down with Hunt Scanlon Media to discuss the current state of the PE market, what she sees looking ahead and how her firm is finding talented leaders in the sector.

Smooch, what are you seeing for the PE sector in 2023 and going forward?
The PE sector is suffering mightily right now as a result of the state of our financial markets. Decisions about recruiting are being slowed or delayed, management teams at the portfolio company level are contemplating which positions they can forgo hiring into for one or two quarters while still advancing their businesses, all the while still attempting to consider preparing their organizations for a potential IPO…the latter being “when,” not “if.”

Is this sector less prone to a downturn if we fall into a recession?
Well, while we may not be in a classically defined recession, I think the really smart PE firm leaders have already begun to tap into their recession strategy headsets and are girding for the balance of the year to be recessionary. I do not believe that the PE sector is less prone to the pain of a recession with the exception of having to slow pre-IPO portfolio companies in their slide into the public markets for that particular transaction. The end result – primarily a postponement of getting the valuation PE firms hope to achieve with current portfolio companies.

What areas and positions have been keeping your firm busy within the PE sector?
Our firm is affected in a very narrow manner and that is directly connected to the pre-IPO situations given that our specialty focus is the investor relations officer and chief communications officer executive search niche. However, when you consider that already-public companies of all sizes continue to seek strategic IROs and CCOs to help them navigate during uncertain times like we are experiencing now, I think we will begin to see PE firm portfolio companies have an earlier “breakout” moment in order to recruit high octane professionals into these functions. The rocket pace trajectory of all companies upleveling the importance of these two functions during, and post-pandemic, has continued steadily. Finally, PE firm deal teams need to remember that investor relations officers are the key to preparing portfolio companies for the path forward – IROs strategically make the rough times better through their wisdom
and counsel. So, if we are headed directly into a recession, one consideration that we advise leadership teams to think about is recruiting an IRO, sooner as opposed to later, so that delays into the public markets will not be so far into the future – don’t wait for an impending recession to manifest itself – prepare early so that you are ready to launch quickly!

Are these searches more confidential and where do you start when looking for candidates for PE outfits?
When we partner with PE firms and their portfolio companies, each situation is different as far as whether we navigate a confidential search process or not. That said, in every situation we sign an NDA so that we can dive deep into the portfolio company strategy, its business, and the key drivers that will aid success but also will create a compelling situation to attract exceptional talent. We collaborate and design a search strategy that is customized to each company situation and depending on management’s thoughts and insights, we then decide together as partners whether the search should be operated as confidential.

From what you have seen, what are PE firms looking to invest in?
One of the characteristics that is always apparent in working with a PE firm is the intense intellectual abilities their teams bring to all conversations and situations. And one of the many aspects of working with these firms is the premium they place in recruiting exceptional talent – they simply do not compromise which I appreciate as it aligns perfectly with our mindset that every entity should have the exact right talent in leadership positions. In part, the effects of the pandemic affected CEOs’ and boards’ strategic thinking about talent, which I believe is a significant advantage to being prepared for a multitude of situations that can arise with little warning. Investing in talent is the single most important investment that any company can make because it ensures superb strategic execution of business plans, which ultimately translates into success.

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