Securing PE succession

In this week’s episode, Mergermarket's funds editor Harriet
Matthews and senior private equity reporter Rachel Lewis explore
how private equity (PE) firms are turning to various options in
an effort to secure succession between generations of management,
with a guest interview from Jon Harvey, Head of Relationship
Management at Investec Fund Solutions.


As the PE industry matures and grows, with GPs growing from
single-strategy firms to multi-strategy asset managers, the
themes of succession and the value within private equity firms
have grown in prominence.


The team kicks off the episode by discussing some recent examples
of succession, including the reported search for a chairman at
Bridgepoint [LON:BPT], and Cinven’s recent managing partner
shake-up.


Investec’s Harvey starts off by discussing the rise in prominence
of the theme of succession, some of the routes available to GPs
(including GP stake sales, IPOs, and management company
financing). Harvey discusses how the theme of succession is
linked to wider pressure within the PE market, including exits,
fundraising, and securing a GP commitment for their next fund. He
also shares his insights on what GPs should consider to shore up
culture and create alignment within their teams when managing
succession.


Lastly, the Mergermarket team discusses key takeaways from the
interview, and also discusses some situations where succession
has not been so smooth, as well as the importance of succession
and monetisation for growth, and the issue of team retention.


Introduction – 0:38


Recent examples of succession plans – 2:14


Interview with Jon Harvey, Head of Relationship Management at
Investec Fund Solutions – 4:40


Triggers for succession – 5:17

Pros and cons of different succession paths – 8:59

LP alignment and GP commitments – 13:04

How to use permanent capital – 17:31



When succession goes wrong – 23:40


Monetisation for growth – 25:00


Retention in PE – 29:25


You can listen to the podcast on your favourite podcasting
platforms, including Spotify and Apple Podcasts.


If you would like to hear more podcasts produced by ION
Analytics, you can access the ION Analytics channel on Apple
Podcasts.


Theme music: 2012 Kick Up The Fire