Olga Kaplan, a technology investor at Goldman Sachs, recalls a time earlier in her career when she was in her 20s sourcing new investments in b-to-b software. That meant spending a lot of time with male executives 20 to 30 years her senior.
“I would say probably once every two weeks there was some sort of inappropriate comment…or an offer to fly to Paris in a private jet, which happened multiple times,” said Kaplan (seated at left in picture). Then again, she added, “It’s a lot better now than it used to be.”
Private equity firms, scrapping for every possible advantage to meet stratospheric investor expectations, continue to binge on the hiring of operating professionals.
In a recent survey-based report, executive recruitment firm Heidrick & Struggles found that as investment professionals spend more time looking for deals, and less time tending to portfolios, “PE firms are adding generalists, industry specialists, and functional specialists from the middle level through the most senior ranks.” Two of the most popular hires? Head of talent and CFO of portfolio operations.
Turning Rock Partners, a New York City-based shop that closed its debut fund earlier this year at more than $400 million, plans to expand its nine-person payroll over the next 24 months by adding up to two investment professionals and a client services professional.
Managing Partner Maggie Arvedlund (pictured, second from right) said that the investment hire or hires would likely be at the junior or mid-level, although the firm is flexible. “We like to meet exceptional talent, and we can often flex up or down for the right individual,” Arvedlund said. The firm is committed to building a team with varied backgrounds. “We are a woman-owned business, and we take [diversity] seriously,” she said.
A large and growing number of private-equity firms have at least one full-time deal originator on staff. But it can still take the skills of a consummate originator to break into the field at the junior level.
All told, 59 percent of the 144 private-equity firms that participated in this year’s Deal Origination Benchmark Report have at least one business development professional, or originator, whose full-time job is relationship-building with deal intermediaries or business owners. That’s up from 47 percent in the 2017 edition.
The report is produced every year by deal-sourcing platform provider Sutton Place Strategies. All the participants are clients of Sutton Place Strategies, so the sample may not be representative of the broader industry. (Sutton Place Strategies is a consulting client of mine.)
It’s one thing to land a job at a private-equity shop as an analyst or associate. It’s another to make the heady climb to partner in a decade or less.
So I took the question of how to become a rising star to Ian Li, vice president at 1315 Capital, a Philadelphia, Pennsylvania-based specialist in healthcare growth equity. Earlier this year Li spoke eloquently on a panel I moderated on opportunities in private equity at the Toigo Foundation’s Catapult event in Jersey City. Li wrote up the following six tips, reproduced verbatim with a few minor edits for style:
Like many buyout shops, Alpine Investors recently welcomed its latest class of freshmen analysts–about a half a dozen this year, all previously interns–recruited from top schools around the country.
But, in an unusual move, the San Francisco-based firm also welcomed a second class of recruits. As part of a four-year-old “CEO-in-training” program, the firm over the past year tapped a dozen second-year MBAs from top business schools to join portfolio companies in senior operating roles after graduation.
In August these recruits began two weeks of private-equity training and networking; some immediately deployed into operating roles, while others joined investment teams at Alpine Investors with the aim of finding an operating role later on. They all receive ongoing mentoring and leadership training.
On the anniversary of 9/11 this week I had the opportunity to talk to Air Force veteran Ryan Brown, who served in the Iraq War, about his goal of building a private-equity business.
“I am on the entrepreneurship journey and my mission is to create jobs for veterans by way of buying and building a portfolio of companies,” Brown wrote me earlier this summer in introducing himself via LinkedIn. “It’s a very ambitious goal, but I know it’s possible.”
When I caught up by phone with Brown on Wednesday, he was in Orlando looking to meet up with hospitality executives at the Hilton Americas Owner Conference. Hospitality is one of the services sectors that he has his eye on to buy businesses in through his firm, Patriot Investment Partners. Brown, who’s active in ACG, recruiting businesses in the Melbourne, Florida area, also works as a turnaround management consultant.
Below is more about Brown, who shares my predilection for bullet points, from a written Q&A lightly edited:
An annual one-day summit for women in finance looking to learn leadership skills and advance more quickly in their careers is itself getting a big promotion.
With the introduction of Groundbreakers | RISE, the Toigo Foundation is giving women on both the GP and LP side of the industry the opportunity to participate in a year-long training and mentorship program.
The program is open to “rising women leaders” with seven to 10 years of experience in finance, and participants get nominated by their firms to join. Individual private-equity firms or teams within global shops can nominate up to two women for each class of students. Among the main components of the program:
* A three-day conference devoted to leadership assessments and goal-setting this December in Austin, Texas;
* Quarterly regional sessions;
* Webinars for building on quantitative skills;
* Coaching by members of the Private Equity Women Investor Network, an association of experienced, successful women in private equity that is one of three “launch partners” of the RISE program.
Tuition is $7,500, and students or their firm must pay for travel and lodging. Along with PEWIN, the two other launch partners are Clearlake Capital Group and the Kwanza Jones & José E. Feliciano SUPERCHARGED Initiative.
Reach the Toigo Foundation to learn more at 510-763-5771.
Hiring, promotions and fundraising often go hand in hand in hand in private equity. Such is the case with Palo Alto, California-based HGGC.
Yesterday the prolific deal-maker–over the last two and a half years the firm has acquired 10 platform companies and more than 50 add-ons–said it had hired 12 new professionals across both operations and investing. That brings its headcount to close to 70. It also promoted four.
The build-up comes as HGGC gears up to raise a fourth fund likely to eclipse $2 billion in size–a healthy notch up from the $1.84 billion the firm speedily raised just under three years ago. Earlier this year, following an investment by Dyal Capital Partners, the firm announced five new hires and 10 promotions.
Avante Capital, a Los Angeles-based provider of uni-tranche debt, subordinated debt and minority equity investments, has set its sights on launching its third fund over the next six-plus months sporting a target in the neighborhood of $300 million including leverage.
Like its predecessors, the pool would be structured as a small business investment company, or SBIC. The Small Business Administration-managed SBIC program provides fund-level leverage up to $175 million per fund. The firm may also raise a sidecar, which could take the form of either a co-investment fund, or a non-levered, non-SBIC pool designed to appeal to investors with a distaste for fund-level leverage.