Private equity backed firms that use interim talent for value creation projects grow their businesses significantly faster than those that do not, according to the latest drxDATA research.
A survey by drxDATA of all 252 exits achieved by UK private equity backed businesses in 2018/2019 found that the most successful PE-backed firms are far more likely to use interim project focused talent during the interim cycle than those that perform less well.
While businesses achieving average exits in 2018/19 grew by 6% per annum during the investment cycle, those businesses that deployed agile resources grew by 14% per year during the investment cycle.
However our analysis also found that use of interim talent was not widespread, with only 37% of PE-backed businesses deploying agile talent resource in their businesses throughout the PE cycle. This indicates that within private equity there is not currently a wide-spread engagement with the potential that interim talent has for value creation.
Samuel Robberts, Head of DrxDATA, said: “The typical perception of a leadership team within a PE backed business is for a set team of individuals, committed to the whole journey. However our research suggests that taking an alternative approach to talent can leverage leadership capital and maximise value creation.”
He added: “While the use of project-focussed talent within private equity backed businesses remains a minority pursuit, our research showed clearly that businesses which deployed interim talent during the investment cycle to exit in 2018/19 were able to achieve considerably better results that those that did not.”
drxDATA® is Drax’s proprietary data analytics platform which is used to develop unique data sets providing insights and analysis for our clients.
Drax contact: Samuel Robberts
Head of drxDATA
Tel: 0203 949 9565