July 10, 2023 – The LCap Group, a strategic investor based in London, has acquired a stake in U.K.-based Altus Partners, a buy-side specialist executive search firm with 30 professionals focused on filling roles for investment, M&A, and finance leadership. The firm operates in several core areas of private equity, building out PE investment, finance, and investor relations teams, from analyst to partner level roles. The firm serves private equity-backed portfolio companies, focused on the finance and strategy, corporate development and commercial finance functions.
Ed Chamberlain, founder of Altus Partners, has established a strong record over many years within private equity recruiting. Over a long career in the sector, he has built long-standing, trusted relationships with key figures around the private equity sector. In 2006, he helped establish One Search before identifying a gap in the market and setting up Altus Partners in 2009. Mr. Chamberlain has also gone on to co-found sister company C&C Search, where he is chair to the board.
“LCap brings a strong analytics platform to Ed Chamberlain and his team at Altus Partners,” said Scott A. Scanlon, co-founder and CEO of Greenwich, Conn.-based Hunt Scanlon Ventures, which offers a full range of critical M&A solutions to guide founders and management teams across the human capital industry to successful exits.
“That capability is in high demand across the private equity sector at the moment and will allow Altus to better evaluate the impact that leadership teams will have on the future performance of their client companies,” said Mr. Scanlon. “Leadership, as we all know, is now seen as the primary lever of value creation in high growth, PE-backed and founder-led businesses, so this is an absolutely perfect fit.”
Expansive Runway Ahead
“Private equity firms outside of the United States are taking note of the expansive growth runway that executive search businesses offer,” said Mr. Scanlon. “We see deal momentum picking up. Clearly, the key beneficiaries are specialist boutiques with recognizable local brands, strong management teams, and eager founders seeking exits.”
Mr. Scanlon said that LCap Group is one of a growing cadre of foreign soil PE investors buying into the sector’s growth story just as their American counterparts have been doing for the last three to five years.
“The prevalence of M&A activity and investments in recruiting businesses has accelerated an already ramped-up period of heavy consolidation within the sector,” said Mr. Scanlon. “It is a trend we now see going global.” Mr. Scanlon said his Hunt Scanlon Ventures business team is suddenly involved in a flurry of deal making activity outside the U.S. “It is growing as fast as our American segment,” he said. “But we believe the fever pitch of M&A transactions, at least for us, has not broken out of the gate just yet.”
Mr. Scanlon said it is an odd happenstance that private equity firms themselves have been shifting from a heavy focus on financial engineering to human diagnostics – where people and talent are the primary value, growth, and performance drivers for their portfolio investments. “With this shift has come a heavier reliance on executive recruiters who are playing a commanding role in top-grading C-suites and building out middle management roles,” said Mr. Scanlon. “With that, private equity firms have taken note that these recruiting platforms themselves are actually terrific businesses to invest in.”
The LCap Group supports businesses by enabling their leaders and investors to create value through leadership talent, insight, and deal origination. LCap’s investment in Altus is the latest addition to its expanding recruitment portfolio. In 2021, the firm acquired a stake in U.K.-based Rowan Executive Search. “Rowan is a strong brand and a superb business which speaks to a clear segment of the marketplace,” said Graham Roadnight, CEO of LCap, at the time. “It has great synergies with the other companies in the LCap Group, and significantly broadens our scale in the private capital and private equity markets.”
The LCap Group Launches Leadership Dynamics
The LCap Group recently launched Leadership Dynamics, a first-of-its-kind leadership analytics and evaluation tool to help the private equity sector and wider business community implement change. Blending big data, 18 years of industry expertise and machine learning integration, Leadership Dynamics is specifically focused on the needs of PE funds and PE backed high-growth businesses. Its primary objective is to provide bespoke leadership foresight to Investment directors, chairs and CEOs, supporting the implementation of change in a bid to reduce the investment risk of an executive team not being able to deliver on their value creation plan.
“We are hugely excited to bring to market a tool that meets the specific needs of our clients and to see our team’s extensive knowledge, expertise and experience making a positive impact on the success of leadership teams,” said Graham Roadnight, CEO. “The LCap Group is about supporting individuals in their decision-making, enabling our clients to achieve their business goals and Leadership Dynamics provides them with insights that elevate their knowledge and experience and help them make the very best decisions.”
Rowan, which is based in Manchester and Lancashire, England, works with business owners across the region to secure top talent. The company, which was founded in 2011 and employs 30, specializes in strengthening the boards and leadership teams of privately and family-owned SMEs as well as those backed by private equity. Rowan helps clients to shape their goals and board structures and to then secure the right talent to accelerate their transformation and growth, and ultimately to crystallize their position.
In 2019, LCap acquired search firm Drax Executive, a private equity leadership specialist. The move helped Drax to further develop its capability to define the capital value of leadership within PE-backed businesses. Drax’s clients are individual leaders considering private equity as an alternative to their existing career, management teams of private equity backed businesses wanting to optimize their performance, and private equity investors pre and post deal.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media