Private equity (PE) firms are operating today in an increasingly uncertain environment. The private equity industry, which once boasted lean operating structures managed by small, nimble teams, is being subject to dramatic regulatory changes that are likely to transform the way organizations work. While private equity remains a preferred asset for institutional investors that have the insight and patience for longer-term bets, competition among private equity funds has increased significantly. As a result, the PE sector will be required to redesign their business models to control costs, improve operational efficiency, and grow their market share.
These mounting regulatory pressures make the business of raising capital and investing in private companies ever more complicated as PE has come under the umbrella of alternative investment rules. A considerable number of regulations have been implemented since the global financial crisis of 2007-08 to increase the accountability of private equity funds. This restructuring of the compliance environment has compelled firms to rebuild their business models and operations not only to ensure compliance, but also to meet the more stringent standards of performance monitoring, asset valuation, and operational excellence being set by investors.
In light of these regulatory challenges and increasing demands of investors, private equity funds are being forced to restructure their internal processes by implementing firm-wide strategies to make reporting processes more agile, comprehensive, and compliant.
Embracing a data-centered strategy remains another effective way in which private equity funds can ensure compliance with increasingly stringent regulations. The sheer volume of data being received and generated by private equity funds demands a more scalable solution that can gather, analyze, and report information in a real-time manner. In addition, a technology-driven strategy is also likely to help firms manage the security risks posed by an increased online presence, usage of cloud services, and mass adoption of mobile devices.
Despite this particularly challenging environment, PE continues to do well. Private equity strategies range from leveraged buyouts, mezzanine capital, and distressed investments to growth and venture capital. It is a mature market that has expanded to infrastructure and real estate as it has become more efficient. What has not changed are LP expectations: investments must deliver returns. As a result, value creation is increasingly anchored in strategic discipline and operational excellence. As firms increasingly look to enhance operational value in their portfolio companies, they need strong operational leaders who are global, able to build performance-based teams and can navigate rapidly changing markets. We understand the importance of agility and speed and adapt well to the organizational sensitivities and specific needs of our clients — to find the executives who can help them maximize the commercial potential of their investments.
Against this backdrop, finding, assessing, and developing the best talent has never been more important, whether at the fund level or in the portfolio.
Across the spectrum, our focus on talent is driven by the primary variable in private equity: long-term value creation.
Allen Austin has successfully completed consulting engagements for clients that span a vast array of companies, public and private, start-up to well-established, not-for-profit organizations, educational institutions and more. Allen Austin delivers high impact consulting to our clients to enhance efficiency, revenue growth, profitability and enterprise value. We provide leadership advisory, assessment, and board services. With expertise across all functional areas, Allen Austin assists management in critical areas such as service, operations, mergers & acquisitions, strategy, and organization. We are passionate about delivering real and sustainable results.
Our executive search and leadership development services are focused on helping private equity firms find the right individuals who have an in-depth understanding of the challenges and the ability to help their company overcome them. To ensure this, we adopt a systematic methodology that is directed at identifying the current and future leadership needs of a company and crafting a personalized solution to fulfill them.