• Marble Hill Partners commission study to pinpoint characteristics essential to leaders of private equity backed businesses
  • Study reveals three primary areas in which private equity incumbents stand apart from their peers
  • Pioneering research enables scientific approach to finding the ideal candidates to direct private equity backed businesses

Marble Hill Partners, providers of executive search and interim management solutions to the private equity marketplace, commissioned a study designed to articulate the pivotal characteristics that distinguish premier private equity candidates.

Sam Smith, managing director and founder of Marble Hill Partners explains: ‘When I am talking to clients’ I paint them a picture. I describe how the person they are looking to hire will need to have a certain type of character. They may not have operated in the Private Equity environment in the past but they must have the same attitudes and objectives as the rest of the management team, cultural fit is essential. The objective of this study was to further de-risk the selection process for executive directors”.

The study was completed in February 2014 by Chartered Occupational Psychologist, Paula Duncan, a leading expert in the measurement of workplace behaviours.  Profiling a sample of over 75 successful senior individuals currently operating in the private equity space, Duncan set about assessing preferences across 36 key areas of activity.

The study highlighted three primary areas in which potential leaders of private equity organisations stand apart from their peers:

1. Delivery of results is their overwhelming priority. The sample group not only demonstrated an unwavering commitment to business growth but were also prepared to align their own personal sense of success to project outcomes.

2. Respondents registered an atypical degree of comfort with managing risk, initiating action and seizing opportunity.

3. Working under the spotlight was not an issue: leaders were willing to be held accountable for business performance and to act with an exceptionally high degree of visibility.

Other traits were also telling.  A high proportion of the group demonstrated outstanding levels of reasoning and problem-solving skills by comparison with the general executive population. Results further emphasised an ability to ‘flex’ behaviour and a willingness to change direction when results weren’t forthcoming.

“The biggest surprise for me” concedes Duncan “was how internally referenced our respondents were”.

“Most people’s definition of success is externally referenced (e.g. am I beating x or y?). This population are ‘opt outs’ – they don’t care what their peers think. All they are concerned about is self-fulfillment and achieving their goals.”

A further surprise awaited on the list of least preferred behavioural indicators. Despite the inherent demand for private equity professionals to work effectively as part of a team, the group displayed little propensity for building rapport.

“Our sample didn’t think pleasantries were important”, comments Smith. “Relationships are driven by task delivery rather than any need to sustain friendships.  Bringing people with them is something our group has the ability to do, but building relationships is purely in the service of task delivery. They don’t think twice about rattling cages; the only question is ‘can you do it or not?’ Friendships are reserved for the weekend.”

Selecting the right candidate to lead a private equity backed business is imperative. Making the wrong appointment can be terminal.  A track record is clearly essential but credentials alone can be misleading.  A more scientific approach is now evolving at Marble Hill Partners – a process that can capture, test and rigorously challenge the conventional criteria for potential private equity leaders.