Private equity firms playing a 'bigger role in recruitment' as economy turns

Private equity firms are taking an increasing role in the recruitment process of the companies they back, say executive recruitment experts.

The Hitchenor Wakeford Group, the executive search and selection company finds senior executives and non-executive directors on behalf of private equity firms.

The company says private equity backers are becoming focussed on the recruitment process to ensure their businesses survive the economic gloom.

Adrian Hitchenor, CEO of Hitchenor Wakeford, said:

There has been a dramatic increase in the number of private equity firms getting involved in the recruitment process. Private equity firms that have backed companies in the region are increasingly reviewing the management teams they have backed. In many cases they are adding additional management to their companies or in some cases replacing people or changing roles and responsibilities within the existing management team.

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With such large sums of money at stake it makes commercial sense for them to take a proactive position during the recruitment process as it is these appointments that will generate their return on investment.

There is a real need for private equity firms to ensure the company they are investing in employ a strong management team. Track record is increasingly important and executive teams who have performed successful exits are in high demand and can command significant packages.

It's the quality of the executives and non-executives that improve the probability of generating a good return on the initial investment made and reduce the risk of business failure. In a market environment that is more competitive private equity firms require stronger people to run the companies.

Already this year, the company has placed people in businesses backed by leading private equity players. Hitchenor Wakeford also boasts a client list including ASDA, Manchester United, United Utilities, UMBRO, Jet2.com, RBS, KPMG.

Outside of the Square Mile, Manchester and Leeds have the largest private equity communities in the UK. Top players Montagu, 3i, ECI, LDC, Altium, Zeus Capital, Barclays Private Equity, Aberdeen Murray Johnstone, ISIS, Gresham, Endless LLP and Phoenix are all located in the cities.
According to the BVLA (British Venture Capital Association) The UK private equity industry has invested over 80 billion (over 60 billion in the UK) in around 29,500 companies since 1983. 21.9 billion was invested in 2006, in over 1,600 companies, of which over 10.2 billion was invested in over 1,300 companies in the UK.
It is estimated that firms backed by private equity employ around 1.1 million people (8% of the private sector workforce).