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PE VP Forum Recap | June 2022

June 9, 2022 Sean Mooney

Every quarter we gather Vice Presidents in PE to discuss current industry topics and to offer these peers the chance to gather, share information, and decompress with one another. In our most recent event, we discussed how scarcity and inflation are impacting human capital in PE as well as how firms are approaching finding opportunities in a choppy market. We’ve listed our top takeaways below.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow PE VPs during our next PE VP Forum? Register here.

Scarcity and inflation impacting human capital: One of the unsung areas where inflation is impacting the economy the most is human capital.

  • Firms are taking a closer look at culture to increase retention and not just thinking about wages, but the total employee experience and related rewards.
  • Investments are being made in portco HR (CHROs, VPs, Directors) to collaborate with marketing functions on recruiting content to promote the benefits of an organization beyond dollars per hour. Portcos are also utilizing their current staff to recruit and network with candidates, such as incentivizing them with referral bonuses.
  • Another interesting concept is building in-house training programs to grow net-new talent pools instead of taking and losing employees to and from competitors.

Finding opportunities in a choppy deal market: The confluence of rising interest rates and geopolitical pressures are causing the deal market to become increasingly choppy. Firms are looking for ways to find opportunities in the face of risk and rising recession risk.

  • Teams are getting creative in deal sourcing by exploring new channels by moving down-market and supplementing with add-ons, focusing on proprietary or limited process situations, looking for failed auctions, and continuing to build new relationships.
  • It’s becoming increasingly necessary to be mindful of quality when selecting which deals to pursue and heightened diligence in underwriting, particularly when modeling downside scenarios. This has become even more important as we’ve seen multiples climb higher and higher over the past 12 months. Deal teams are adding extra layers of scrutiny to verify that businesses are valued at a level that will be appropriate over the coming foreseeable months.
  • Teams are spending significant time exploring targets’ operating leverage to understand performance in downside scenarios.
  • A number of firms are seeing an economic reset as an opportunity to find unique opportunities to potentially get quality assets at lower multiples, gain market share, and/or consolidate markets as weaker competitors seek safety and circle wagons.

We thoroughly enjoyed getting to gather with PE VPs to discuss these current industry hot topics. We’d be happy to connect you to the PE-grade, exact-fit, third-party resources you need to assist you in this pressurized market, just contact us here.

Learn more about how we can specifically help Deal Quarterbacks and access a toolkit that can help you do your job more efficiently here.

April 2022 Roundup: BluWave Client Insights

May 3, 2022 Kyle Johnson

BluWave works with over 500 PE firms from around the globe as well as their portfolio companies and proactive independent companies, connecting them with pre-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our clients’ musings on everything from retail industry news to ESG and CEO perspectives.

Blackstone recently gathered CEOs across their portfolio companies for their annual CEO Conference. While we live in a world where it’s rare for anyone, nonetheless decision-makers, to agree on political or major topics as well as growth and business strategies, here are some key insights that brought the group together. Highlights include recruiting and retaining talent, finding success in simplicity, and keeping ESG at the top of their agendas.

Read more >>>

Vice President at Baird Capital, Becca Schlagenhauf, dives into root causes of grid instability and how the growth in demand can lead to growth in distributed energy resources. The movement towards green energy still comes with its own sets of challenges associated with cost and reliability. As new technologies are being brought online, this has created solutions that are going to be vital to the global electricity infrastructure moving forward.

Read more >>>

Learn about Heartwood Partners’ continual increased interest in different recycling and environmental services businesses and about their notion to “do well by doing good.” Their ultimate interests lie in the recyclability of finished products after they have been used by end-customers. Opportunistic themes and strategies involve packaging, agriculture, consumers, and more.

Read more >>>

MiddleGround Capital Founding Partner, John Stewart, spills his secrets on how their operational focus enabled their companies to build resilience prior to and during the pandemic. Due to the pent-up demand from 2020 in manufacturing and industrials, Stewart highlights the opportunities for American workers as manufacturing wages are spiking. With the industry being under-invested as a whole for the past few decades, the opportunities for business to take advantage in technologies to produce more products is unmatched.

Read more >>>

 

Here’s what some of our clients had to say last month on cybersecurity, inflation to sales, and more.

2022 PE Innovator of the Year, MiddleGround Capital

April 1, 2022 Delaney Walker

Our inaugural 2022 Top 50 PE Innovator Awards recognized the top 1% of firms in the private equity industry as determined by BluWave for their innovative practices in:*

  • Proactive Due Diligence Practices
  • Transformative Value Creation
  • Progressive Private Equity Firm Operations
  • ESG

As part of our awards, we recognized MiddleGround Capital as the 2022 PE Innovator of the Year due to their differential achievements across the above categories. MiddleGround makes control equity investments in B2B industrial and specialty distribution businesses. The firm was founded by John Stewart, Lauren Mulholland, and Scot Duncan in 2018. MiddleGround partners with small and mid-sized businesses, providing extensive operational resources to help them build and grow. The firm is a signatory to the United Nations-supported Principles for Responsible Investment, which provides a framework for investing responsibly and integrating ESG practices into investment practices.

Learn more about why MiddleGround was selected for this top award as well as their approaches to due diligence, value creation, pe firm operations, and ESG in the video below.

View the full list of awardees here.

 

*BluWave, LP has not received investment capital from and holds no ownership interest in the PE firms evaluated or recognized under the Top 50 PE Innovator awards program. BluWave received no compensation from any of the PE firms in connection with this awards program. However, BluWave may otherwise provide services to the PE firms and/or portfolio companies, but BluWave confirms that its assessment of the PE firms was independent of any such service arrangements. Top 1% in the PE industry is based on BluWave’s review of the more than 5,000 PE firms in the U.S. and Canada from which 50 PE firms were selected as award recipients.

PE VP Forum Recap | February 2022

February 21, 2022 Kyle Johnson

Every quarter we gather Vice Presidents in PE to discuss current industry topics and to offer these peers the chance to gather, share information, and decompress with one another. In our most recent event, we discussed many topics and have listed our top takeaways below.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow PE VPs during our next PE VP Forum? Register here.

 

  • Firm Differentiation: Both fund-raising and then deploying capital are increasingly pressurized in 2022.  Business owners and LPs are trying to differentiate between approaching PE firms. It’s important to LPs and owners (especially founders) that you and your firm are doing something “different”- either from a track record or industry knowledge perspective.  Some firms are leaning into well-defined theses with continued pressure testing, and many are complementing this with additional operational or advisory resources. Firms can make deeper connections with owners by relying on the experience of operating partners or senior advisors who have true industry experience.  Show that you as an investor know where businesses have been, where they are growing, and how you can help them reach potential.
  • Deal Sourcing: When it comes to identifying potential assets for acquisition, firms are approaching this task in different ways.  Some are sticking strictly to investment theses and related lists of companies, then ticking down these lists.  Others are leaning heavily into the connections of their LPs and Partners. Not only does this make networking with business owners easier, but deal teams can move quickly once they have exclusivity due to their existing knowledge of the vertical. Focus on geography worked to the advantage of some firms during the pandemic, and firms are finding it easier to build a relationship with business owners who are local to them. Whether this means more in-person meetings or simply the connection between people from a similar area, it’s driving meaningful deal flow.
  • Developing and attracting junior talent: How to get junior talent in the door? If your firm is based in a smaller or more regional city (St Louis, Detroit, Nashville), stay in touch with those who are local to the area but may be working in banks along the coast.  Many were interested in returning “home” during the pandemic. Other firms are cultivating relationships with local investment banks and hosting happy hours to meet with potential associate talent, thus creating a local pipeline to source junior talent. Some firms are looking beyond strict modeling skills (which can be taught), and leaning more into prioritizing soft skills and executive presence. Once these hires are made it’s important to get them involved in workstreams that make them feel like they’re contributing to firm initiatives. Culture is key, which is becoming easier as people return to the office.

We thoroughly enjoyed getting to gather with PE VPs to discuss these current industry hot topics. We’s be happy to connect you to the PE-grade, exact-fit, third-party resources to assist you in this tight market, just contact us here.

Learn more about how we can specifically help Deal Quarterbacks and access a toolkit that can help you do your job more efficiently here.

Thank You & Cheers to 2022

December 22, 2021 Houston Slatton

We couldn’t do what we do without our incredible network of loyal, reliable, and expert service providers. Here’s a quick note from some of our team to say thank you for all that you do as 2021 comes to a close:

Cheers to 2022, we look forward to working with you in the new year!

PE VP Forum Recap | December 2021

December 7, 2021 Kyle Johnson

Every quarter we gather vice presidents in PE to discuss current industry topics and to offer these peers the chance to gather, share information, and decompress with one another. In our most recent event, we discussed many topics and have listed our top takeaways below.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow PE VPs during our next PE VP Forum? Please contact us at events@bluwave.net.

Increased Deal Competition 

  • Deal competition is at an all-time high, so firms are getting creative in how to best address this. Common themes across the ideas that were shared were:
    • Determine the best approach for your firm that allows you to quickly identify the best possible deals where you have unique insights.
    • Seek specialization from an investment strategy perspective.
    • Utilize help in the form of third-party advisors that have industry expertise and can assist in assessing the deal.

Deal Surge

  • There is currently an overabundance of deals in the market which means sellers are considering values like speed and partnership in addition to price. Look for opportunities to emphasize these values in order to differentiate yourself when you can’t differentiate on price.

Labor Dynamics

  • Firms are continually facing difficulties in attracting and retaining talent due to the pressurized market. Internally, one solution has been to offer associates more than one track for their advancement, and externally, firms are developing innovative solutions for longer than average portco exec hiring processes including beginning recruiting processes before the deal even closes.

We thoroughly enjoyed getting to gather with PE VPs to discuss these current industry hot topics. We’s be happy to connect you to the PE-grade, exact-fit, third-party resources to assist you in this tight market, just contact us here.

Learn more about how we can specifically help Deal Quarterbacks and access a toolkit that can help you do your job more efficiently here.

Sean Mooney on the Middle Market Musings Podcast

October 8, 2021 Kyle Johnson

Recently, BluWave founder & CEO, Sean Mooney, spoke with Andy Greenberg and Charlie Gifford on the Middle Market Musings podcast about the origin of BluWave and the general trends that they all have observed recently in the private equity industry. Charlie and Andy asked Sean about how BluWave was born out of his time in the private equity industry and also drilled into the particulars of the business model. Gifford, Greenberg, and Mooney also spoke to trends such as higher valuations, compressed returns, greater industry specialization, and heightened pressure to capture growth and operational improvement that have been noticeable in the market as of late.

Interested in listening to the whole podcast yourself? Click below.

 

PE VP Forum Recap | September 2021

October 1, 2021 Kyle Johnson

Every quarter we gather Vice Presidents in PE to discuss current industry topics and to offer these peers the chance to gather, share information, and decompress with one another. In our most recent event, we discussed many topics and have listed our top takeaways below.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow PE VPs during our next PE VP Forum? Please contact us at events@bluwave.net.

Deal Yardstick 

  • Firms are using a mix of quantitative and qualitative scorecards to gauge the attractiveness of a deal. Our VP attendees discussed the value of scorecards, but that they also need to be used in a measured way that incorporates other important factors during diligence. 

3 Things The VP Attendees Shared That They Thought Would Improve the Deal Evaluation Process Most

  •  Calibrating the level of diligence with the impact of a deal – beware of analysis paralysis.
  •  Let associates present deals during the Monday Morning Meeting for training and development purposes.
  • Find a way to streamline the NDA process which is time-consuming without apparent value add.  

IOI/LOI

  • Different firms are deploying different approaches to get the highest expected value out of their efforts before LOI.  

Portco CFOs

  • Develop a CFO playbook to help onboard CFOs more consistently and quickly.  Collaborate with and nurture your CFOs, but hope is not a strategy if they are not working out. 

We thoroughly enjoyed getting to gather with PE VPsto discuss these current industry hot topics.  Here at BluWave, we are specialized to quickly connect you with the exact-fit, pre-vetted, PE-grade service providers you need exactly when you need them.

Never worked with us before? Check out our How To Vet BluWave video to learn more about us and how we can help. And if you have an immediate need, contact us here and we will be happy to help you right away.

How we did it: LMM VP with critical need for ERP selection advisor

August 23, 2021 Kyle Johnson

A PE fund came to us with a critical need for an ERP selection consultant for their portco in the manufacturing industry. Since acquiring the portco, they knew that the company’s older ERP system would need to be replaced. Knowing that the selection and implementation would be a lengthy process, they were urgently seeking a consultant with experience in the manufacturing industry at the same scale as the portco that could guide them through what needed to be evaluated before making a selection and then manage the entire process. After quickly understanding the key needs of our client, we were able to match them to a curated couple of ERP selection consultants in our network within 24 hours. Selecting their ideal choice, the client was able to quickly and confidently kick off their ERP selection process.

Read the full case study here. Have a similar need that you would like to connect with us on? Contact us here and a team member will be happy to begin helping you within 24 hours.

How We Did It: Head of Sales needed to drive value at a recently acquired portco

June 23, 2021 Sean Mooney

A private equity firm principal and portfolio company CEO came to us with a need for a Head of Sales for their healthcare logistics company. Since the acquisition, the portfolio company had been growing rapidly, and they needed to make key hires across multiple functions. Moving quickly, we worked to thoroughly understand the client’s specific needs. We introduced them to two sales recruiting firms that specialized in senior go-to-market roles in the healthcare space. After a thorough vetting process, the CEO made a decision and hired one of the candidates presented. To date, the partnership is a success and going smoothly.

Do you have a similar need in the interim exec area or any other unique need we can help with? Contact us here and we will be happy to help.

For the full story click here.