Really informative panel today facilitated by @Marc Hodak and @Randy Zeno, and featuring @Murtaza Ali, @Kurt Brykman and @RJ David, three PE company operating partners. Among them their businesses cover the range, from distressed assets to lower middle market to large enterprises.
In spite of the diversity of their portfolios and investment theses, there were common themes that stood out:
1. Significant change from the "old days" of PE where investors could generate returns by leveraging a high percentage of the asset's value to create more value. Now all are focused on creating value by ensuring great talent is in place who can operate the business to generate real growth, and supporting the teams' success.
2. Exit multiples are now lower than entry multiples -- a departure from past expectations. In addition to focus on talent, this change in business model dynamics has led PE investors to focus with greater urgency on the value they can bring to their portfolio companies: They invest in capabilities that are important to their success, e.g., digital transformation, human capital, IT, government affairs, purchasing.
3. All are putting some emphasis on ESG, but mainly to this point on ensuring progress on DE&I goals.
For those who couldn't make it, look for information on the replay.
Thanks to CEO Trust, Marc and the panelists for a great session.
--written by Amy Radin, Board Director, Author, Transformation Expert