Every sponsor has their own unique operational approach to collaborating with portfolio company executives. Where some firms are more investor-oriented when engaging with portfolio company leaders, others tend to lean towards operational governance. Levels of operational resources available vary across different firms, each falling somewhere on a continuum of no internal operating resources to an extensive operating team and library, along with strict compliance for utilization. In order to find success, CXOs must thoroughly diligence how their needs and work styles compare with a particular firm’s governance style and leadership structure.
According to PECXO’s recent PE Firm Performance Survey, a number of common qualities emerged that executives prefer from their sponsors. With increasing numbers of executives leaving their roles due to misalignment, leaders should diligence for these attributes when considering a new opportunity to ensure optimal fit. Similarly, sponsors can leverage this framework to mitigate costly turnover and attract new talent.
#1: Productive Sponsor-Management Balance
Fig. A — Top 5 Priorities for Executives When Choosing a Sponsor
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