Work / Life Balance in Corp Finance at company recently bought by PE firm
Company is profitable and has been bootstrapped to this point, but a large PE firm made a majority investment in it recently. The strategy is to grow through M&A going forward, and plan is to have monthly board meetings for the time being.
I'm looking at the opportunity to join the Corp Finance team of the portfolio company, but in my 8+ years experience in corporate finance I haven't worked with a PE-backed company. I'm wondering how the PE ownership could impact the work life balance at the company. Curious if anyone can share how they partnered with the corporate finance team at portfolio companies. I'd also be interested in how you built a good working partnership with the finance function at the portfolio company.
Pretty generic question, I know, but any info would be appreciated.
1) It will depend on the sponsor and your level in the CorpFin team - you will be less affected the more junior you are
2) You'll probably be more busy given the situation - whether that be M&A related work or more reporting for your sponsor (generally)
3) If you're in contact with the sponsor you'll probably start getting more emails outside of 9-5 hours; if you're involved in the M&A you'll get worse hours as deals ramp up
I really appreciate the guys who get back to me quickly even if just to say "got your email, will work on this, here's my timeline to complete and when I plan on getting back to you" - generally I have plenty of other things to do but like the peace of mind of knowing my request/question was received
Thanks for the quick response. It's for a director role, with one analyst for support, and the role reports into the CFO. I don't have M&A experience myself (just the academic stuff from my MBA) and the CFO said we'd likely be relying on the PE firm to assist with M&A support. Monthly board meetings seems a bit overkill to me on an ongoing basis - am I right in thinking that might cool down after an initial period where we establish a working relationship, trust, solid board package and reporting? Or does a lot of anticipated M&A activity mean monthly board meetings are warranted?
Seems like a great opportunity to learn, but I just had a second kid and I'm trying to get an idea of what I'm signing up for.
Monthly board meetings may slow down as you develop a working relationship but it's not uncommon for monthly meetings during periods of heightened M&A.
Relying on the PE firm for M&A support means that there's an Associate at the PE firm that will be doing most of the modeling - that's not to say there isn't work for you, but you won't be quarterbacking the transactions. From a lifestyle perspective, that's a good sign.
Congratulations on the second kid. I think you will be fine if that's what you're worried about. You may be increasingly "on" where you may have a higher degree of unpredictability, but you get used to that quickly and there are plenty of ways to manage that in your personal life so that it becomes a non-issue. Again, this may be overstating the issue, as it's not like you are about to start pulling 70h weeks (probably).
I would expect the following:
- The pace of work is likely to be much accelerated because the private equity guys decisively move towards generating the highest returns (and there is timing component in the IRR metric);
- They will want the corporate finance function to "think like an investor" and focus on things that they care about the most - i.e. smart capital allocation, cash flow generation and value accretion through EBITDA growth. Together with your accounting colleagues, you will be expected to reduce focus on net income, net earnings growth and p/e as these metrics are not valued in the PE world. You will not be able to do any M&A without proving an attractive ROI from each opportunity you bring to the table;
- You will probably learn what operational agility looks like because your team - together with others - might be cut to absolute bare bones. The PE owners will want everyone to deliver on key KPIs and embrace a hands-on operating style. The mindset will be that of a lean, ownership-driven organization, so unlimited travel budget, superfluous support staff and plush corporate benefits are likely to be reduced.
- As you already mentioned, your board meetings will move from quarterly to monthly. PE owners will expect you and your colleagues to be transparent about the company's performance. They will completely re-cut and re-do your board pack to measure things that PE investors care about. They will expect you to over-communicate at all times. If something goes wrong, they will have no problem calling on a Saturday night and if things go really bad, they will literally move in into your offices.
- You will spend about a year preparing your company for an exit, laying out strategy for the next owner and maximizing EBITDA at exit;
This might sound unappealing to you? Well, this is how an opportunity is likely to look like when you have smart financial owners. And if they are good partners to your company and management, they will provide a good management incentive plan that might result in a life-changing financial return for you guys.
Good luck!
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