October 19, 2015


Rob Berick

Meet the new boss … same as the old boss?

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Few segments of the financial market are more personality driven than private equity. When a PE firm is launched, it’s largely done so on the founder’s reputation more than anything else.

Subsequently, regardless of whether or not the founder’s name is on the door, he/she is the personification of the firm, the embodiment of the investment strategy, and the owner of the vast majority of longest-tenured limited-partner relationships. The reputation of the firm and its founder are intrinsically linked.

Add in the fact that PE firms do not transition leadership anywhere near the frequency of publicly owned companies, internal and external stakeholders have little appreciation for “life after the CEO.” As a result, the stakes and anxiety levels are especially high when ushering in the next generation of senior leadership at a particular PE firm.


Since most PE firm leadership succession plans rely on internal candidates, there are a number of unique communications issues to consider. For example, while the newly named CEO is known among stakeholders, he/she also is likely to be a first-time CEO. As a result, he/she will face skeptics internally and externally, as well as existing perceptions that may need to be dislodged. Therefore, it will be critical to establish his/her:

  • Experience that will help make the company even stronger in the future
  • Leadership philosophy
  • Broad observations on the firm, its portfolio, and the market opportunities
  • Unrelenting commitment to strong ethics and integrity
  • Presence in civic and industry organizations
  • Clarifying and creating buy-in for changes in priorities, procedures, etc., under new leadership
  • Establishing an authentic and differentiated leadership “voice” and communications style – especially given the founder’s typically strong presence and engaging persona

Other areas of emphasis during a leadership transition include:

  • Creating realistic and measurable near- and long-term expectations to help create a common focal point for the organization, as well as stemming the flow of inaccurate information and speculation
  • Building credibility for the reconfigured leadership team (i.e., who will step into the previous role of the new CEO and who will fill roles of other internal candidates who might be leaving the organization)
  • Redefining the working relationships with limited partners, directors of the portfolio companies, colleagues and business associates

Striking the right balance between honoring the retiring executive and building excitement for the newly elected executive is rarely easy … doing so in an environment where the CEO is the founder and the successor is an internal candidate makes finding that balance that much more difficult …

Anything you’d add to the list of considerations?


Written By Rob Berick

Robert G. Berick is a senior vice president and managing director at Falls Communications. For more than 20 years, Rob has helped companies engage investors and enhance value through communications. He can be reached at rberick@fallscommunications.com or @robberick.

1 comment Show


November 2, 2015 at 5:20 pm


Hi Loved the article!

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