The Private Equity Playbook: Fractional Executives

Tampa Bay, where we are based, has a growing number of Private Equity owned companies and a thriving entrepreneurial ecosystem. With a growing number of private equity owned organizations like Tech Data, Catalina, Checkers and Rallys it’s not surprising why a Private Equity Playbook is needed now.

Private equity holds several inherent advantages over public ownership, including the ability to boost equity returns through creative leverage arrangements. Yet it is more than economic re-engineering that explains the difference in returns between private equity and the public sector.

The Growing Need for a Private Equity Playbook

A principal reason for the success of the private equity model is its unique ability to add value to a business through a singular focus on maximizing shareholder returns.

However, private equity companies face an increasingly challenging operating environment, not only in Tampa, but nationwide, in which sound investments are harder to find, and land, portfolio ownership cycles are extended. Exit valuations are more challenging and unpredictable which is increasing the importance of a strong private equity playbook.

The Rise of Fractional Executives in Private Equity

There is a growing dependence of Fractional Executives who are helping private equity firms maximize the value of their portfolio companies. They do this by developing growth strategies, identifying opportunities for operational efficiency, post-sale or merger integration, information technology and digital revamps, business intelligence implementations, and assessing follow-on M&A opportunities.

The majority of these senior leaders have diverse industry experience. This allows them to perform analysis on private equity clients to make decisions confidently and effectively across all phases of the corporate and investment life cycle and all investment types and deal structures.

Elements of the Private Equity Playbook

There are many different components of a private equity playbook. It is essential that it focuses on all aspects of a business and examines business and digital transformation. Here are some examples:

• Use of real-world, operational, digital, and corporate governance experience to lead sustainable transformational change at the operational, technical, and organizational levels.
• Deployment of interim or fractional management roles when needed until the right permanent talent is found
• Unlocking deep business intelligence insights into unexploited organizational value during due diligence and thereby identifying potential risks and opportunities.
• Conducting technology and digital assessments, functional evaluations, and holistic management and cultural analyses that assess all improvement levers across the company.

How does a Playbook Speed Time to Delivery

Having pre-built processes and playbooks to deliver commercial due diligence engagements with speed, transparency, focus, and collaboration provides the right assistance in a deadline-driven deal situation.

Private equity firms all have a sense of urgency, a desire for practical, bottom-line solutions, and their need for speed and flexibility. Every investment requires its own set of solutions. 

Fractional executives can use the private equity playbook to understand the market position of the target company and pressure test key issues, technology debt, and management projections for growth. Our differentiator has seasoned industry veterans to advise what to ask about, and experience gathering information from a variety of sources, including substantive primary research. We also bring content and facts to bear to generate a substantive fact base and insights for the specific deal and are a thought partner in the M&A process.

How Ovesto Can Help Your Organization

Ovesto is the leader in providing on-demand fractional executives. We work with many of the top private equity firms in the world from KKR to Clearlake Capital. This experiences allows us to provide substantive leverage through data-driven insights and actionable advice, particularly developing strategies to drive short- and mid-term revenue and profit growth, and helping create value from the day of deal close through the exit.

Our fractional executives are often former consultants or operators. Ovesto’s combination of real-world experience and analytic capabilities, provide a differentiation that is unique in the industry.

In summary, we understand how to work with private-equity firms to create value and have done so across a myriad of industries and different size companies.