Iro organization

Redefining the PE leader search industry

Seasoned executive search consultant Smooch Repovich Rosenberg joins Hunt Scanlon Media to discuss her approach to finding top PE talent and how her firm works with clients.

July 18, 2022 – The private equity industry has changed drastically over the past 30 years and even more in recent times which have presented many hurdles. However, private markets rebounded in 2021. After a year of pandemic-induced turmoil that suppressed fundraising and trading, private markets rebounded. Fundraising increased nearly 20% year over year to a record close to $1.2 trillion. A new set of risks emerged in early 2022 with the potential to undermine growth and performance.

“With the effect of the pandemic on the talent equation, I think private equity firms have a better understanding that identifying talent and recruiting exceptional talent has become more competitive,” said Smooch Repovitch Rosenbergfounder and CEO of SmoochUnplugged. “It’s a direct result of CEOs, boards and global management teams raising the performance bar for those recruited into their management teams. Additionally, I think private equity firms are looking for more sophisticated research partners whose knowledge and expertise is not only highly targeted, so they are considered subject matter experts, but there is also a strong appetite to collaborate with companies that have relationships long-standing with specific talent areas.

Ms. Repovich Rosenberg is unsure of the impact of the latest economic downturn on the private equity industry. She does, however, believe that private equity firms should stay the course during downturns and continue to focus on how to get a return on their investments, which is where a company like SmoochUnplugged has a knock-on effect. distinct leverage by focusing on recruiting Investor Relations Officer talent. “There are several ways for private equity firms to get a return on their investment: selling a holding company to a larger entity or taking them to the public markets, which requires specialized preparation well in advance of the launch date. registration,” Ms. Repovich Rosenberg said. . “It requires the attention of a seasoned IRO who knows intellectually and intuitively how to position a private company’s brand and financial metrics for IPO (IPO readiness) and an IRO who has a outstanding experience with the global investment community in advancing a company to the public markets.

Looking ahead, Ms. Repovich Rosenberg foresees an increased focus on the IPO process that markets seem to favor more than a SPAC that non-PE corporate-sponsored entities have seemed to choose over the past two years; it seems that SPACS has also fallen out of favor with talent. She believes that there are already a considerable number of positive results on the market, and that there will be more to come, such as:

  • “Raise the bar” effect: the increased expectations of CEOs and boards of directors of members of the management team – the “raise the bar” effect, which has been a necessary change for many many years.

Related: Private equity firms are investing in increasing their talent game

  • The Pivot of Flexibility: Shift to greater intellectual and psychological flexibility in terms of corporate structures, work environments, and how leaders lead their organizations and teams. This, most likely, will result in the development of more knowledgeable professionals whose intangible leadership attributes will be honed.

Spotlight: Redefining the Research Industry for PE Leaders
Smooch Repovich Rosenberg is the founder and CEO of Smooch Unplugged. She focuses on strategically finding private equity investor relations officers to help companies complete their portfolio company valuations as these entities consider entering the markets. public. His 30+ years working with pre-IPO companies across all industry sectors is one of the most unique search consultancy strategies on the market. Working with portfolio companies of private equity firms and other pre-IPO companies in North America, Europe and Asia has been an asset to her as an expert in financial markets and in-depth research work and extensive investor relations officers that she and her team lead. .

  • Intentional Inclusivity: Historically, the notion of including people has been left to individual mindsets, and now leadership teams are making an intentional pivot to weave inclusion into the fabric of their cultures, which means advancing a wider talent roster than ever before.

Features in the spotlight

Ms. Repovich Rosenberg notes that for the most in-demand roles, all functions that report directly to a CEO as well as two additional key leadership roles – Investor Relations Officers and Communications Officers, both of which are critical to advancing corporate brand management. with the investment community and building a new partnership with internal constituencies. “Both functions make the good times great and the bad times better, with all internal and external constituencies,” she said.

Today, private equity firms require search firms to serve as very specific experts in niche areas, especially functions that are constantly changing, year on year, according to Ms. Repovich Rosenberg. “Investor relations is a prime example – when a pre-IPO company is considering going public, the private-public journey can be very alien to portfolio entity management teams,” she said. . “As such, if the research consultant is not a subject matter expert who can advise CEOs and CFOs on the complicated process and critical nature of the responsibilities of creating an effective management/relationship with the investment community, many portfolio companies will be ill-prepared to become a management team of a public entity.This is where knowing the intimacies of the IRO universe and IR talent becomes paramount to the future success of the holding company. “

Ms. Repovich Rosenberg acts as an advisor to private equity firms and their portfolio companies to help them understand two primary sentiments: a) the rigors of the journey to becoming a public company management team and the considerations that require intellectual investment before becoming a listed company, b) coaching private business leaders on the critical nature of being “ready” to go down the private-to-public path with respect to recruiting an IRO. “Let’s face it, there are certain elements of preparation that need to be in place before recruiting an IRO so that a management team is educated on the role, their handling of the conversation with the investment, the community, etc. “said Ms. Repovitch Rosenberg. “Serving in an advisory capacity like this is a win-win situation for everyone.”

Related: Private Equity Recruitment and What It Takes to Find the Right Candidates

Contributed by Scott A. Scanlon, Editor; Dale M. Zupsansky, editor; and Stephen Sawicki, Editor – Hunt Scanlon Media