A Year of Talent Triumphs and a Look Ahead: 2023 Reflection & 2024 Outlook for the Private Equity Sector

As we close the chapter on 2023, it’s clear that this year marked a paradigm shift in the private equity sector.

Our industry has long grappled with numerous factors that drive success in portfolio companies.

However, 2023 was the year we collectively acknowledged a fundamental truth: talent is the number one factor in ensuring the success of portfolio companies and the realization of an investment thesis.

At Bespoke Partners, we’ve been at the forefront of this shift. Our core belief has always been that the right leadership is crucial for driving growth and value creation.

This year, our research provided compelling evidence to support this belief.

A staggering 84% of private equity firms we reviewed now have dedicated staff focused on optimizing talent within their portfolio companies.

You can read more about the trend in our Private Equity Talent Benchmark report, available here: https://www.bespokepartners.com/private-equity-talent-report/

This shift towards a talent-centric approach is not just a trend. It’s a strategic realignment that recognizes the immense value of human capital in driving business success.

Bespoke Partners’ Milestone: Placing Our 1000th High-Performing Executive

2023 was also a landmark year for Bespoke Partners. We achieved a significant milestone by placing our 1000th high-performing executive in a private equity software portfolio company.

This achievement is not just a number. It represents a thousand instances where we’ve connected exceptional leaders with companies where they can truly make a difference.

Each placement is a testament to our rigorous, tailored approach to executive search and our deep understanding of the unique needs of the private equity sector.

Our data-driven search process is meticulously designed to identify leaders who are not just skilled but are the right fit for the unique culture and challenges of each portfolio company. We believe that this bespoke approach is why we’ve been able to consistently place leaders who drive transformative change and deliver substantial value to our clients.

Looking Ahead

As we look to the future, we anticipate a resurgence in deal flow for software and SaaS, signaling a robust and dynamic market as dry powder is put to work. This renewed activity will bring fresh opportunities for investment and growth. However, it also brings challenges, particularly in the form of the need for strategic exits.

Exits are a critical component of the private equity lifecycle, and their importance will be heightened in 2024. A successful exit strategy hinges on the performance and stability of the portfolio company, which in turn depends on the quality of its leadership. As deal flow increases, the demand for top-tier executives who can steer companies towards successful exits will escalate.

Bespoke Partners’ Role in Navigating 2024’s Challenges

At Bespoke Partners, we are uniquely positioned to help private equity firms navigate these challenges. Our expertise in leader recruitment is more than just matching resumes with job descriptions. It’s about understanding the nuances of each company’s journey and the specific leadership qualities needed to navigate that journey successfully.

As I noted in a recent blog post, one of the key trends we are tracking is the rise of strategic talent management and particularly the arrival of the Chief People Officer in many C-suites of private equity portfolio companies.

Our approach in 2024 will continue to be proactive and strategic. We will deepen our engagement with private equity firms to understand their evolving needs and will expand our network to identify and attract leaders who can not only manage growth but also drive successful exits. We believe that our focus on leadership excellence will be a key factor in enabling our clients to capitalize on the opportunities that 2024 will bring.

Opportunities and Challenges

As we embark on a new year, we do so with the knowledge that the landscape of private equity is ever-evolving. The challenges and opportunities of 2024 will require a nuanced understanding of market dynamics and an unwavering focus on the quality of leadership within portfolio companies. At Bespoke Partners, we are excited to play a pivotal role in this journey, continuing to connect exceptional leaders with the companies that need them most.

In summary, 2023 was a year of recognizing the paramount importance of talent in private equity. As we look to 2024, we see a landscape ripe with opportunities for growth and exits, underscored by the need for outstanding leadership. At Bespoke Partners, we remain committed to being at the forefront of this journey and partnering with our clients to deliver this exceptional leadership for their portfolio companies.

Author:
Eric Walczykowski
Chief Executive Officer

Eric is passionate about building high-performing teams that value doing their best, working together, overcoming adversity and learning.

As a proven growth executive, Eric has served as CEO, President, Board Member, Investor and Advisor for technology companies that achieved over $4.5B in successful exits.

Eric brings to Bespoke Partners significant professional services experience from Deloitte and Andersen, as well as the high-growth client executive perspective for private equity-backed technology companies.

Eric earned an MBA from the Kellogg School of Management at Northwestern University and a BS in Business from Fresno State University.

Outside of work, Eric enjoys spending time with family, coaching baseball, travel, attending live events and sipping good wine.