Bull or Bear? | October

Are you bullish or bearish?

BULL OR BEAR?

“What are the key success factors for a Private Equity CEO that are equally relevant to his or her executive leadership team?”

According to a 2017 Alix Partners survey, 73% of Private Equity CEOs are replaced during the investment life cycle (usually five years) and 58% are gone within two years. So, what are the questions you should ask yourself if you’re considering moving into this high pressure/high reward position? Here are five:

  • Can you be satisfied executing the predetermined Private Equity sponsor strategy prebaked into the investment thesis rather than formulating an original business strategy?
  • Can you cope with tight and frequent oversight by the Private Equity sponsor/board members with a board meeting or board call at least once per month?
  • Can you make rapid decisions with incomplete information including the removal and replacement of senior executives who are not doing the job you need done?
  • Can you wear multiple hats – for example, CEO/COO/CAO all rolled into one — and consistently multi-task without contracting attention deficit disorder?
  • Can you focus on EBITDA above all other performance measure, even at the expense of growth if necessary to exit well?

OPINION: BULL
If, after some genuine introspection, you can honestly answer the questions above in the affirmative you may be better off as a CEO than dealing with quarterly earnings releases and related analyst conference calls, often hostile activist shareholders, and short-term hedge fund driven stock price gyrations that often characterize the public markets these days.

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