PE portfolios consistently outperform when led by executives who have operated — not managed — in comparable environments. This report examines what separates operators from administrators and why most search processes are not designed to find them.
Due diligence processes routinely scrutinise financial performance and operational infrastructure. Leadership quality — whether the management team can perform under new ownership — is assessed far less rigorously, and far later than it should be.
Most private equity investors underestimate how significantly leadership quality affects operational outcomes — and overestimate how quickly a wrong hire can be corrected. This report examines the patterns we observe across industrial portfolio companies: where leadership gaps most commonly appear, what drives them, and what the cost of delayed action looks like in practice.