Understanding the role of PE investment in supporting business growth

At its core, private equity is an investment approach that involves buying a significant stake in a company with the goal of improving its financial performance and operational efficiency. Private equity firms typically work closely with company management to identify areas of opportunity and to develop and execute growth strategies.

PE investment can play a key role in creating and supporting business growth, helping companies become efficient, competitive and ultimately profitable.

To understand why PE investment can play such an important role in business growth it’s worth briefly revisiting what a PE firm is and the approaches they use to achieve its goals.

What is a private equity firm?

A private equity firm is a type of financial investment entity that specialises in investing in private companies or taking public companies private. They will provide funding to companies that they identify as having significant growth potential, helping them to improve their financial performance and operational efficiency.

What do private equity firms do?

After a private equity firm has acquired a stake in a company, it will then work closely with the company’s management to identify potential areas of improvement, while developing a strategy to deliver growth.

As well as financial power, PE firms bring a wealth of resources with them, including financial expertise, operational experience and the chance to leverage an extensive network of contacts. By providing hands-on support and guidance, private equity firms can help to improve the operations and financial performance of the companies in their portfolio.

Because of the financial stake that PE firms have in companies, they have a strong incentive to generate returns. To do this, they require the very best talent to be in place in the companies they back.

Driving innovation and generating growth

With their focus on expanding the business and achieving long-term success, private equity firms encourage companies to pursue new ideas and strategies that can drive growth. The expertise that they bring to the table can be used to identify opportunities for operational improvements, such as streamlining processes and reducing costs.

By freeing up resources, companies can then focus on developing and implementing new products and services.

PE firms provide portfolio companies with access to the capital they need to invest in research and development, hire top talent, and pursue new opportunities. With greater financial resources, companies can pursue more ambitious and innovative projects that might otherwise be out of reach.

All of these factors can make working for a private equity-backed company an attractive proposition for senior executives. Private equity-backed companies provide a fast-paced and dynamic work environment, with a focus on achieving results quickly. This can be exciting for senior executives who enjoy taking on new challenges and working in a high-pressure, high-reward environment. They can be the perfect environment to test, hone and develop your skills.

What are private equity firms looking for in executives?

Private equity-backed firms typically look for executives who have a strong track record of success and a combination of skills and experience that can help drive growth and operational improvements.

They look for and reward individuals who possess the ability to develop and execute a strategic vision. Primarily, PE-backed companies are looking for exceptional talent who have the ability to work rapidly in pursuit of clearly defined goals and objectives.

Rowan Group has a long history of working with PE-backed firms, helping them find the right talent to drive them forward.

Contact us to find out more about our Executive Search and PE services.