Private equity investment is primarily associated with a large injection. However, this ignores the many softer benefits investees often experience following an investment.
One of the main benefits of securing investment is what a private equity investor can bring to the Board table. As part of the investment process investor and investee will search the market to find an appropriate Chairperson to aid the company’s ongoing growth and bring additional skills to the Board. The incoming Chairperson will bring a skill set tailored to the growth plans of the company, whether that is a black book of industry contacts, experience of growing through acquisition or a particular expertise of overseas expansion.
The allure of private equity support will also help attract senior industry professionals to other key roles in the organisation. The increased profile that comes from securing investment frequently results in an increase in incoming job applications a key softer benefit in sectors where an industry-wide skill shortage is often prohibiting organic growth.
An investment will be followed by significant positive media coverage, resulting in a significantly heightened profile. Private equity funds also increasingly focus on
the benefits of intra-portfolio trading and peer networking of Board members with portfolios of dozens of high-growth companies the potential for friendly customer introductions can be significant.
Private equity investors are emphasizing these and other softer benefits that come with investment, and a number of funds have established internal operational teams to act as a freely available resource for portfolio companies giving investees access to deep expertise in marketing, operational improvement, digital, sales, technology, finance and a number of other key functions.
The importance and impact of the softer benefits of private equity investment can be significant both on the growth trajectory and the structural soundness of a company, and should be given thorough consideration when choosing a financial partner. A private equity investor will typically invest for 3 5 years so relationship and these softer benefits should be key when choosing a financial investor.
Cavu’s deep knowledge of the private equity markets in the UK means that we will always consider the fit between investor and investee not just the size of the wallet when introducing investors to a potential opportunity.
