The anticipated growth of the Private Equity (PE) industry in the Arab region is set to create a substantial demand for a new C-suite breed of Chief Executive Officers, (CEOs), Chief Financial Officers (CFOs) and board directors, according to a regional recruitment expert.
“With the expected growth of PE deals in 2011, the region is set to witness a huge demand on c-suite executives, and we are well positioned to research and place the best available talent in the region,” said Russell Adam, Managing Partner, CTPartners Middle East, a performance-driven executive search firm.
A recent report by Bain & Co reveals that PE is poised for a comeback in 2011, following the recent financial and economic recession, resulting in a healthy growth in deal flow, increased fund raising activities and exits.
With the estimated abundant liquidity of $1 trillion globally and regionally, a high level of acquisitions and direct investments activities is expected. This will be driven by the pressure on PE firms to seek deals that utilize the uninvested capital before the end of the fund investment life, which is normally 10 years.
As an asset class, PE has proved to be quite an appealing investment vehicle, attracting both institutional and individual investors. While still a nascent sector in the Arab world, with most PE firms having started only five years ago, the enterprise value it creates is already recognised by both investors and operating companies.
The secret to this added value is a dynamic management team led by a forward-looking board which implements operational improvements and boosts productivity and competitiveness. PE firms ensure the placement of senior quality talent in their subsidiary companies who are also capable of creating additional revenue streams through organic growth and synergetic acquisitions. Experienced decision-makers who possess superior operational and technical skills are normally selected from a variety of industries and placed into the newly acquired portfolio companies.
According to Adam, the main thrust of PE firms in their portfolio companies begins immediately after they make the right acquisition for their fund. They usually start, at the outset, with the placement of these quality management teams.
This is where the need for executive search firms arises. They work closely with PE firms’ management to recruit new senior leaders to revamp the existing business model and create a new long-term strategy that will further grow the company resulting in increased Return on Investment (ROI).
“The expected industry recovery means that PE firms will have strong investment activity, resulting in a series of acquisitions, and they will seek to hire top decision-makers who can turn the companies around within the life of their investment. This is anticipated to create a huge demand in the region for CEOs, operating partners and financial experts,” explains Adam.
“Globally, PE firms tend to pursue talent with critical business acumen skills, strong financial expertise and the ability to maximize the performance of companies. The Arab region is no different. PE firms don’t just seek senior executives to simply optimize costs or efficiently allocate capital, but rather CEOs to drive value-creation and operating partners who will further support the efforts of the portfolio companies’ management teams,” he adds.