For years, private equity firms have followed a predictable script when parachuting leadership into portfolio companies: hire a chair who’s “been there, done that” – multiple exits, ideally sector-specific, ideally known to the fund, and, frankly, more often than not, male, pale, and in their 60s.
But that script is starting to fall apart.
I’ve been in this space long enough to see the shift firsthand. The generation of chairs and NEDs with multiple PE exits under their belts is retiring or stepping back. And here’s the kicker: there simply aren’t enough deals to produce the next cohort of “battle-hardened” leaders. Private equity deal volumes are down; exits have slowed. In 2024, UK PE exit activity was at its lowest in over a decade (Pitchbook). Fewer exits mean fewer operators getting the kind of experience that PE likes to rubber-stamp.
The ‘Experience Trap’
Every fund wants a chair who’s been through an IPO or trade sale, someone who knows where the bodies are buried, who can “get it over the line.” But if you only fish in that pond, you’re fishing in a shrinking one! Worse, you’re probably ignoring the leaders who can scale modern businesses: digital natives, international thinkers, leaders from outside traditional PE-backed sectors.
I’m increasingly seeing funds scrambling when the usual suspects aren’t available. I’ve had conversations with investors looking for chairs and NEDs for portfolio companies in emerging sectors, needing people who can help scale digitally-enabled businesses, subscription models, ESG-driven operations – and struggling to find talent who don’t look and sound exactly like the last three chairs they hired.
And this isn’t just anecdotal. According to a 2023 survey by AlixPartners, 65% of PE firms ranked “difficulty finding the right leadership for portfolio companies” as their top operational concern. Another report by Odgers Berndtson flagged a growing shortage of chairs willing to step into “hands-on” PE portfolio roles rather than traditional, lightly involved NED positions.
Time for a Broader Lens
Private equity needs to stop treating leadership recruitment for portfolio companies like ticking a box: “must have exited two companies, must have PE-backed experience, must have led X.”
It’s time to consider what actually drives value creation today:
- Sector expertise beyond financial engineering
- Leaders comfortable with transformation, digital strategy, operational resilience
- Chairs and NEDs who reflect diverse perspectives, not just in gender or ethnicity, but in how they think, challenge, and govern
Frankly, I’d rather back a chair who scaled a challenger brand in a disrupted sector than someone who ticked a generic “two exits” box.
A Faster, Smarter Solution
That’s why we built the Operator Network. We’ve curated a community of 26,000 non-execs and chairs, 5,000 of which have extensive experience with PE, VC, or family office experience.
Funds using our platform can move fast, not just because we have depth, but because we’ve already filtered for leaders with skin in the game, scars from the fight, and an operator’s mindset. We’re seeing funds using the Operator Network not just to fill chairs and NED seats, but to build transaction advisory boards, interim transformation leaders, and growth-stage advisory talent.
In a market where “the usual suspects” are stepping away, and the traditional PE playbook is running out of pages, for me, this is the future.
It’s time to look beyond the CV, beyond the checkbox, beyond the same faces at the same conferences.
The next generation of portfolio leadership is here – and it looks refreshingly different!