What to Look for in a PE Partner

When adding a partner, it’s critical to find an organization that is aligned with your goals. However, PE firms often have varying areas of expertise. Some focus on early-stage companies while others specialize in certain industries or invest only in companies with high-growth potential. Be sure to find a group you like, has relevant experience, and presents:

  • A strong network of sales and industry contacts, supportive resources, management- and board-level talent, and close relationships with financial institutions
  • Close alignment of management interests with that of the owners. This alignment, through communication, investment, and incentives, fosters innovation and long-term growth
  • A long-term view and the singular goal to improve the underlying value of the company
  • A willingness to unlock a company’s full potential by spending on sales, marketing, product development, talent, capital expenditures, and acquisitions

Note: PE investors succeed only when the companies they own succeed. A recent EY report found that two-thirds of the earnings growth at companies with a private equity partner came from business expansion and improvements.