Customer Type: PE Firms

Operating Partners’ Forum Recap | December 2022

December 20, 2022 Delaney Walker

Every quarter we gather operating executives in PE to discuss current industry topics and to offer peers the chance to gather, share information, and decompress with one another. In our most recent event, we gathered to discuss top lessons learned in 2022 and 2023 initiatives.

These forums are for operating executives at private equity firms only and follow Chatham House Rules, so listed below are high-level takeaways only. If you are an operating executive in private equity and interested in joining fellow operating executives during our next Operating Partners’ Forum, RSVP here.

Top Lessons Learned in 2022

  • Even the most resilient supply chains struggled in 2022.  We continue to be in a global supply chain crisis.  
  • Pricing strategy and related pricing strategy advisor usage was a major focus in 2022 to try and stay ahead of the inflation curve. 
  • Labor is still a big challenge and will continue to be. Turning to PE-grade recruiters as well as interim execs is a common solution.
  • PE firms and Portcos are doubling down on IT, data & analytics strategies, and implementation processes to be more agile, informed, and automated.  

2023 Initiatives

  • Debt has become less available and more expensive with rising interest rates, which will make it tougher to complete platform deals in 2023. 
  • Digitization efforts will accelerate in 2023. 
  • Having the right org structure in place is top-of-mind for 2023 as labor markets will continue to be tight.   
  • PE-grade, third-party resource usage will accelerate, offering force multiplication for PE Ops teams, bringing them specialized expertise, and enabling portcos to operate more variably.   
  • The PE industry is largely prepared for 2023 and a recessionary environment due to the proactive actions taken in 2022.

We thoroughly enjoyed getting to gather with PE Operating Executives to discuss these current topics. We’d be happy to connect you to the PE-grade, exact-fit, third-party resources you need, just contact us here.

Learn more about how we can specifically help ops execs here.

PE VP Forum Recap | December 2022

December 20, 2022 Delaney Walker

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 the current state of the economy, debt markets, and the outlook for 2023.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. If you are a private equity vice president and interested in joining fellow PE VPs during our next forum, you can register here.

Economy and Debt Markets

  • The state of the economy has compelled PE firms to be more intentional with their investment theses.
  • With rising interest rates, inflation, and recession risk, the debt markets have been curtailed, causing private equity firms to rethink how they structure deals.
  • As debt financing becomes less available, PE firms are becoming more creative to get deals done – including increasingly utilizing commercial lenders, and non-traditional funding sources.

Outlook for 2023

Looking ahead to 2023, private equity firms are developing strategic plans for their portfolio companies to find opportunities in the face of recession and determine where to deploy their capital in a relatively volatile deal market.

  • Many are expecting the first half of the year to be challenging, but are foreseeing a recovery later in the year if/as interest rates and inflation stabilize.
  • Different industries have been impacted differently by the economic downturn.
  • PE firms are proactively building value by using internal and external resources to do whatever they can to lift portfolio company revenues, optimize costs, increase cash flows and liquidity, and get the right people in place.

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 here.

Women in PE Forum Recap | December 2022

December 9, 2022 Delaney Walker

Every quarter we gather leading women in PE to discuss current industry topics and to offer intelligent women the chance to gather, share information, and decompress with one another. In our most recent event, we gathered to discuss debt markets, navigating recession in the portfolio, and diversity at the PE firm level.

These forums are exclusively for women at private equity firms and follow Chatham House Rule, so listed below are high-level takeaways only. If you are a woman in private equity and interested in joining fellow leading female PE professionals during our next Women in PE Forum, RSVP here.

Debt Markets

  • Difficult debt markets are affecting the ability to get deals done, requiring more creativity to get deals across the finish line.
  • PE firms are shifting back towards commercial bank financing options as they are more active and holding relatively steady. 2023 predictions include:
    • Traditional banks are going to be relatively active lending on new deals versus unitranche lenders.
    • It will be particularly difficult to get financing for distressed/story assets.
    • Credit officers may try to clear underperforming loans off of their books.
    • As the cost of debt increases, the M&A market will continue to cool.

Navigating a Recession in the Portfolio

  • As the economy slows, PE firms have had to shift value creation priorities (and spend more time on the portfolio than usual). Some of those new priorities include:
    • Talent. PE firms are trying to get the right people in the right seats.
    • KPIs and Reporting. PE firms are also focusing on getting the right KPIs/reporting in place to track all leading indicators.
    • Add-Ons. If the portfolio company has a strong balance sheet, it can be an excellent time to acquire competitors or struggling companies to expand market share.

Diversity at the PE Firm Level

  • The data is overwhelming – diversity is the right and the smart thing for business, yet most PE firms struggle to recruit and retain women.
  • PE firms need to have a thoughtful strategy to recruit women, track KPIs, and hold everyone within the firm accountable.
  • Recognizing the applicant pool for women in PE can be smaller, PE firms are looking outside of the traditional PE background to identify top talent.

We thoroughly enjoyed getting to gather with women in private equity to discuss these current topics. We’d be happy to connect you to the PE-grade, exact-fit, third-party resources you need, just contact us here.

Recruiter for Interim Controller Critically Needed

Firm had immediate need for interim finance recruiting firm with SaaS experience

A PE partner came to us with a vital need for a recruiting firm to place an interim controller in their software portco. The recent departure of their previous controller and senior accountant left the PE firm in urgent need of an interim controller who could come in, take the reins, and assess the function while the PE firm searched for a fulltime hire. With the task beyond the internal recruiter’s reach, the firm was seeking a recruiting service that could identify interim candidates who had controller experience in other PE-backed portcos, familiarity with the company’s systems, relevant industry experience, the ability to quickly ramp up in the role, and the potential to be a rent to own hire.

BluWave identified top recruiting firms from pre-vetted network

Leveraging our founder’s 20 years in private equity and our experience working on thousands of projects with 500+ PE firms, we have extensive frameworks for assessing PE-grade recruiting needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of recruiters that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with the select pre-vetted recruiters from our invitation-only Intelligent Network that fit their exacting needs.

Client quickly sourced the needed controller thanks to the recruiter BluWave provided

The day after the initial scoping call, the PE firm and portfolio company were introduced to a PE-grade recruiting firm that specialized in finance and accounting with experience recruiting for SaaS businesses. The PE firm engaged the provider and was able to quickly source a controller with relevant experience for the SaaS portco.

Pricing strategy expert urgently needed for SaaS portco

Building out a new product GTM strategy, PE firm & portco needs pricing expert

A PE senior associate came to us with a critical need for a pricing strategy expert for their SaaS portfolio company that was developing a new application to sell into the healthcare sector. The firm and portco had been working with a GTM strategist on the commercial plan, but now urgently needed a pricing expert that could help them determine how to price the new product. With the product almost ready to roll out, they needed a pricing expert that could start within the next 2-3 weeks, had industry experience, and could develop as well as justify a pricing strategy for the application.

BluWave has in-network pricing expert with relevant industry knowledge

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade pricing strategy needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of pricing experts that uniquely meet the private equity standard. We interviewed the PE firm and portfolio company to understand their specific key criteria, and then connected the client with the select pre-vetted pricing strategist from our invitation-only Intelligent Network that fit their exacting needs.

Firm selects best in class provider to move forward with pricing strategy

Within 24 hours of the initial scoping call, the PE firm was introduced to two PE-grade pricing experts that specialized in SaaS based businesses and were available to help the client immediately. The client selected their ideal choice and was able to confidently develop a pricing strategy and ultimately, roll out their new application to the healthcare market.

In the Know: How to Tackle Merger Integration

November 30, 2022 Delaney Walker

As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE firm clients. In our most recent installment, Scott Bellinger, BluWave Consulting Manager, shares some of the top reasons our clients bring in merger integration groups and the benefits they gain from them. Learn more by watching the video below.

Interested in connecting with the PE-grade, specialized merger integration providers you need? Contact us here to quickly get started.

Video transcript:

According to data from the BluWave Activity Index, third-party merger integration specialists are consistently one of the top 10 service providers that private equity firms look to for support. Add-on acquisitions are standard operating procedure in private equity, and leading firms rely on expert third parties to seamlessly execute any integration. Here are some of the top reasons PE firms bring in merger integration specialists and the benefits they see from engaging these groups.

When integrating two companies, the goal is always for 1+1 to be greater than 2, however, if not integrated properly, a new add-on investment can quickly go south.  PE firms who trust their integrations to expert third parties can guarantee that the integration will be executed properly, resulting in an outcome greater than 2. Additionally, by trusting their integrations to third parties, they are able to rest assured that their companies will be fully integrated – something that strategic buyers are looking for more often. Plus, if the integration is occurring in a founder-led business, a third-party expert is essential given that most founder-led businesses rarely have the talent in-house to effectively integrate both businesses.

The benefits of utilizing these experts go far beyond achieving an outcome greater than 2. For one, these groups can excellently integrate companies quickly – our pros can perform an integration from start to finish in as few as 120 days. Plus, some of our innovative groups can provide additional services complementary to strictly executing your merger integration, such as conducting a pre-merger synergy assessment to help you better understand potential cost-savings beforehand.

We would be happy to connect you with the PE-grade third-party merger integration expert that is exactly suited for your needs, just give us a shout at info@bluwave.net.

In the Know: Proactive Due Diligence Practices

November 19, 2022 Delaney Walker

As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE firm clients. In our most recent installment, Keenan Kolinsky, BluWave Consulting Manager, shares some of the proactive due diligence practices we see PE firms take that separate the more innovative private equity firms from the others. Learn more by watching the video below.

Interested in connecting with PE-grade specialized due diligence providers for your next need? Contact us here to quickly get connected to the ones you need.

Video transcript:

Due diligence is a critical piece in the private equity deal cycle, and we equip hundreds of leading private equity firms with the right PE-grade diligence providers they need – and when they need them. Performing thousands of projects every year, we gain a unique perspective to some of the more proactive and innovative approaches to the diligence process, and I want to share two such approaches we’ve seen that are separating some of the more proactive private equity firms from the others.

Number one, using the right diligence providers for the right deals. Many private equity firms have a go-to list of commercial, IT, and operations diligence providers they leverage for nearly every deal. However, each deal’s different and may require a different slate of providers to get the most out of each unique diligence phase, or diligence stream, depending on a variety of factors such as the target’s industry, the deal size, target technology or operational nuances, timing, and more. Many of our proactive private equity clients realize these nuances, and we support them by connecting them with the diligence providers whose functional capabilities, expertise, and experience account for these factors – uniquely positioning them to deliver excellence on that deal. This allows private equity firms to gain better insights with more speed and certainty, which, in turn, optimizes the entire diligence process for the respective deal. In private equity, one size does not fit all.

Number two, expanding the functional breadth and depth of diligence. Times are changing, and it’s more important than ever to get diligence right and to gain the necessary actionable insights, not only to make a more informed investment decision, but also to begin equipping the value creation plan. Especially in today’s market, value creation doesn’t and can’t end with only commercial, technology, and operational levers.As such, many of our proactive private equity clients are institutionalizing increasingly common diligence streams such as HR, digital, data, and ESG diligence to inform both investment decisions and value creation plans. We continuously map the market for PE-grade diligence providers across various functional areas, industries, price points and more so that you don’t have to.

If you or your teams are using the same slate of diligence providers for every deal, it may be time for a refresh. As you start to consider your slate of diligence providers for your next deal, give us a shout at info@bluwave.net and let us connect you with the right diligence providers for the right deal.

In the Know: How to Action BI & Analytics Experts

November 10, 2022 Delaney Walker

As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE firm clients. In our most recent installment, Jeremy Yoder, a BluWave Strategic Account Executive, shares how to action BI & Analytics experts, detailing the different use cases firms and other proactive companies have for bringing in data & analytics experts. Learn more by watching the video below.

Get connected to a BI & Analytics Expert.

Video transcript:

In our increasingly digital world, business intelligence and analytics is a growing input factor for companies to measure their level of growth and for private equity firms to evaluate the success of their portcos. PE firms come to BluWave with needs for data and analytics specialists who can help drive effectiveness and efficiency within their portfolio companies. Here are just a few of the most common use cases we see for why a firm brings in data and analytics specialists.

Number one, developing more measurable metrics at the portco level. The first step to making data-driven decisions is having the right metrics and reporting measures in place. Many companies are lacking this when their first PE sponsor comes into the picture, so our clients equip their new portcos with specialists who can help companies build a solid metrics and reporting foundation. This gives the PE firm visibility into how their portcos are tracking against those set goals.

Number two, data diligence. For companies with large sets of data on products and customers like companies in the B2C sector, there is often hidden value hiding within these datasets if they aren’t being analyzed. When companies aren’t actioning the data available to them, leading PE firms bring in specialists to uncover what stones are being left unturned and help glean risks and actionable opportunities from the data that already exists.

Number three, cleaning and assessing data. The most forward-thinking PE firms are using specialists to clean and assess their portcos data so that they can improve the precision of their evaluations and more deeply inform the health of their organizations. We have a deep bench of business intelligence and analytics providers at the ready for a variety of niche needs. To get connected to the PE-grade,exact-fit provider you need, contact us at info@bluwave.net.

Interim CFO urgently needed for prep for sale process

PE firm urgently needs an interim CFO to help with prep for sale

A PE managing partner came to us with a critical need for an interim CFO to lead their software portco through a sale process. Hoping to sell within the next 3 to 4 months, the managing partner was urgently looking for someone who could immediately come in to the portco, take point on gathering essential documentation for sale, manage financial projections, and serve as a leader within the portco during this transitional time. The PE firm quickly needed a PE-grade interim CFO who was available for the next 4-6 months, had deep SaaS expertise, and was able to travel onsite several days a month.

BluWave has pre-vetted providers matching client’s needs

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade prep for sale needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of interim CFOs that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with the select pre-vetted interim CFOs from our invitation-only Intelligent Network that fit their exacting needs.

Firm engages interim CFO and begins prep for sale

The day after the initial scoping call, the PE firm and portfolio company were introduced to two PE-grade interim CFO that specialized in helping software companies prepare for sale. The client selected their ideal choice. The firm engaged the interim executive and was able to confidently proceed with their prep for sale process thanks to the leadership of the CFO we connected them with.

Leadership coaching consulting firm needed for executives

PE firm urgently needs leadership coach for prep for sale process

A PE vice president came to us with a critical need for leadership coaching services to build up one of their portco’s mid-level management teams in preparation for sale. Looking to exit the company within the next year and with several high performing mid-level leaders with little to no executive experience, they were in critical need of a provider that could coach this cohort up for the sale process. The firm specifically wanted a provider that had experience in a PE setting, practice around exit prep, and expertise in coaching the management level just under the C-suite.

BluWave identifies exact-fit leadership coaching expert

Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade prep for sale needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of leadership coaching consultants that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with the select pre-vetted executive coaches from our invitation-only Intelligent Network that fit their exacting needs.

Firm engages provider to coach management through prep for sale process

Within less than 24 hours from the initial scoping call, the PE firm was introduced to an exact-fit leadership coaching provider. The client engaged the recommended provider and was able to confidently move forward in their efforts to sell the business knowing that their management team would now have the proper coaching required to successfully deliver on their roadshow presentations.