Between a fund and its portfolio lies opportunity, by Rebecca Liebel

9 April 2019 | Rebecca Liebel, Senior Consultant

We are seeing more merger and acquisition (M&A) roles within portfolio companies emerging in the private equity jobs market as funds opt for buy-and-build strategies. These roles occupy a space between the strategic and the operational, offering fast-paced acquisitions alongside a sector-specific focus.

M&A Roles

Best of both worlds

The increasing drive for value creation through growth within portfolio companies has led to this more active M&A approach and greater synergy between funds and their portfolio companies. This requires oversight from someone who is close to both the fund and the portfolio company, with the ability to guide the acquisition and integration of new companies. This space is populated with ample opportunities for the analytically minded who have a flair for strategic growth. 

An interesting alternative to traditional investment roles, M&A positions within portfolio companies suit financiers who enjoy the fast-pace deal flow of private equity but who are keen to be closer to the coal face and involved in day-to-day strategic and operational decisions.

Growing opportunities

More recently in Germany and Switzerland private equity-backed buy-and-build platforms have been attracting top bankers and strategy consultants due to the strategic, operational mix they offer. First hand operation insight combined with the dynamism of a private equity deal focus.

In the last 12 months we’ve seen a growing number of people entering this space as the deal volume in the buy and build platform increases and the deal function moves from the fund into the portfolio companies. A large number of platforms have been based in the healthcare services area but also in industrial and general business services.  The services sector in general lends itself well to buy-and-build consolidation, where economies of scale can be gained through streamlining business processes. 

What’s the route in?

People enter these roles from investment banking M&A, private equity and corporate M&A backgrounds. For those moving from funds, it’s the perfect opportunity to deepen their work in a sector that really interests them. Career stage is no barrier to entry; we’ve placed people into junior, mid-level and senior roles, including some very experienced investors.

Long-term prospects and compensation

It’s common for people in these positions to stay with the portfolio company post-divestment, taking a step up towards a bigger platform and staying operational, but with the experience you gain taking a similar role in another portfolio is also an option. Furthermore, this route could lead to an investing role within a private equity fund following a similar strategy.

The compensation structure will offer a good base and bonus, often with an added incentive scheme that reflects the growth of the business. Such exit-driven incentive schemes may even pay out earlier than carry schemes within private equity. 

 

If you wish to learn more about such opportunities across the DACH region please reach out to our Senior Consultant in Munich, Rebecca Liebel.

About the author

Rebecca joined us in Munich in 2013 to focus on the German-speaking and wider continental region. She travelled the world with the Australian Trade Commission and Consulate before permanently relocating to Germany.

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