Would appreciate any input on anyone working for a PE firm. Are there any functions that their firm outsources eg: financial modelling, market research , valuation etc? Doubt it’s done at the large funds and potentially more likely at the smaller more boutique ones where there are fewer resources? Looking at trying to do some consulting work so thought I’d ask the question
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Based on the most helpful WSO content, it's not uncommon for PE firms to outsource certain functions, especially when they lack the resources in-house or need specialized expertise. Here are some insights:
Financial Modelling and Valuation: While large PE firms typically have in-house teams for financial modelling and valuation, smaller or boutique PE firms might outsource these tasks to consultants or specialized firms, particularly for complex transactions or industries where they lack expertise.
Market Research: PE firms often outsource market research to gain insights into specific sectors or market trends. This can be done through consulting firms or specialized market research agencies.
Operational Improvements: Some PE firms, especially those that are "operationally hands-on," may hire external consultants to drive operational efficiencies within their portfolio companies. This could involve hiring a six sigma consultant or other experts to optimize processes.
Portfolio Monitoring: There are instances where PE firms outsource portfolio monitoring to independent firms, especially if the asset is geographically distant from the PE firm or requires more attention than the in-house team can provide.
Specialized Services: For specialized services such as HR, IT, or digital transformation, PE firms might bring in external teams of functional experts to advise on specific levers.
It's important to note that the decision to outsource can depend on various factors, including the size of the PE firm, the complexity of the task, and the firm's investment philosophy. If you're looking to offer consulting services, it could be beneficial to target areas where PE firms commonly seek external expertise and tailor your services to meet those specific needs.
Sources: What is an "operationally hands-on" PE firm?, Q&A: European PE professional at a Large-cap Megafund, Independent Portfolio Monitoring firm, Is PE existentially fucked?, What are the Roles within Real Estate Private Equity?
Yeah it's outsourced to bankers
Acuity Knowledge Partners (also owned by PE) do that. market research, slides, etc.
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