Challenging market conditions driving creative approach to funding distributions

Private equity groups were getting “more creative” in finding ways to generate cash for their investors given the tougher backdrop, said David Martin, a partner at law firm Linklaters. The last time buyout firms made less cashing in on their portfolio companies was in 2013. In the meantime, firms have been increasingly using margin loans and net asset value financing to fund distributions to investors. Likewise with continuation funds. Despite the more challenging market conditions, competition for high quality talent at all levels within potfolio companies remains high. People that can do more with less, at pace and who can drive value creation, remain at a premium.

It's all about the culture

Interviewing for a new role? Assessing cultural alignment is paramount. Your compatibility with the company's culture can be the linchpin differentiating success from failure, your performance level, and your personal engagement. Furthermore, it can significantly influence your career trajectory within the organization.

When examining the culture of potential employers, we typically derive our initial impressions from interactions during the interview process. Often, these judgments are based on an intuitive sense of fit or misalignment, without a structured framework for comparison or evaluation of corporate cultures.

When conducting an analysis of an organization's culture, especially within the context of a client brief for a project, I concentrate on the following key areas:

1. Dominant Characteristics

   • Is it a close-knit environment, akin to an extended family?

   • Do employees freely share their thoughts and ideas?

   • Is it a dynamic, entrepreneurial setting where risk-taking is encouraged?

   • Is the focus primarily on achieving results?

   • Does a competitive, achievement-oriented ethos prevail?

   • Is it a tightly controlled and structured workplace where formal procedures govern actions?

2. Organizational Leadership

   • Does the leadership team prioritize mentoring, facilitating, or nurturing?

   • Are they known for entrepreneurship, innovation, or risk-taking?

   • Do they exhibit a no-nonsense, results-oriented approach?

   • Is the leadership recognized for their coordination, organization, and efficiency?

3. Management of Employees

   • Is the management style characterized by teamwork, consensus, and participation?

   • Does it encourage individual risk-taking, innovation, freedom, and uniqueness?

   • Is it characterized by hard-driving competitiveness, high expectations, and a focus on achievement?

   • Does it emphasize job security, conformity, predictability, and stable relationships?

4. Organization Cohesion

   • Is loyalty and mutual trust the glue holding the organization together?

   • Is there a strong commitment to the organization's values?

   • Is innovation and development a core focus?

   • Is the organization primarily driven by an emphasis on achievement and goal attainment?

   • Do formal rules and policies play a significant role in maintaining order?

5. Strategic Emphasis

   • Does the organization prioritize human development, trust, openness, and participation?

   • Is it committed to acquiring new resources and embracing new challenges?

   • Does it encourage experimentation and prospecting for opportunities?

   • Is competitive action and market dominance the primary focus?

   • Does the organization lean towards permanence, stability, efficiency, and control?

6. Criteria of Success

   • Is success measured by human resource development, teamwork, employee commitment, and people-centric values?

   • Does the organization define success by product innovation and uniqueness?

   • Is market leadership and outperforming competitors the key to success?

   • Does success hinge on efficiency, reliable delivery, smooth operations, and cost-effectiveness?

By using this framework to gather insights, you'll uncover recurring themes across these categories, providing a comprehensive understanding of what it's like to work within the organization day-to-day. Comparing your preferred cultural attributes to those of prospective employers will enable you to assess the level of alignment and identify any gaps that may necessitate adjusting your personal preferences. This evaluation will also help you gauge the short-term, medium-term, and long-term feasibility of such compromises and their potential impact on your personal performance.

PE M&A will consolidate sector to 100 platforms that matter

The number of private market fund managers will shrink to as few as 100 over the next decade as higher interest rates, fundraising challenges and increasing regulatory costs drive a massive wave of consolidation, according to David Layton, chief executive of Partners Group

Managers responding to fundraising pressures in more difficult economic conditions and shifting towards wealthy individual clients as a driver of new asset growth, would drive a significant rise in mergers and acquisition activity, he said in an interview. “It is really only the large players that can withstand the forces reshaping the private markets industry. We could see the current 11,000 or so industry participants shrink to as few as 100 next-generation platforms that matter over the next decade,” said Layton.