LBO opportunities & Management
A lot of managers, after long careers in big corporations, used to approach head-hunters for positions in companies under LBOs. This has changed in these difficult times for Private Equity: fewer operations, less leverage, smaller dreams…
Are there real opportunities today to join an LBO company as CEO or CFO?
Many managers (and it begins generally in their early 40’s) are looking for more independence and entrepreneurship, but do not want to create their own companies, because it is either too risky, or because they do not have The Idea.
Then, they think they can take over a company, or find a position in a company under LBO. It is true it can be a good deal: nice compensation, and potential leverage. Generally Private Equity firms propose that they invest 1 year salary, and the goal is to have a multiple of this investment once company is resold.
If the drivers of this kind of opportunities have not changed, the economic situation has, and candidates know that. In 2009, they showed less enthusiasm for this kind of job, because they know that there is less leverage.
There are also fewer opportunities all over the world. For example, In France in 2008, out of 194 LBO operations there were only 24 Management Buy In (MBI) or Buy In Management Buy Out (BIMBO) of which 80% were valued below 15 Mi€. On the first semester 2009 out of 62 LBO, there were 13 MBI or BIMBO of which 100% were valued below 15 Mi€. In a nutshell, for CEO, we are talking about only 24 new positions in France in 2008.
What profiles do those jobs require?
Quite surprisingly, Price Equity firms are always open to meet good candidates. For them, this means experienced managers, with a good knowledge of the sectors those firms have invested in (which is often public) or of the sectors they are considering investing (information they need), ideally with a mix of experience in large groups and smaller companies.
Why are Private Equity firms opened to meet candidates while not recruiting?
Because they want to know the market, the good potential candidates for their investments, identify potential board members, discover a new market through a specialist… They love seasoned managers presenting them investment opportunities. They can help you to externalize one of your less strategic activities or to prepare for your next career step. So if you have a chance to meet them, do not miss it.