5 Ways Private Equity Strategy Consulting Can Help PE Firms
4 Min Read
Politicians and legislators have something in common that we often overlook because of their broad range of political viewpoints. Nearly all of them actively seek advice to make the best decision possible for their constituents. They recognize that while they may be good leaders, they do not know everything. How could they? They look to the experts to get the answers they need and to lead decision-making.
The same holds true for businesses — smart leaders, including those seeking private equity consulting, seek advice for the same reasons.
Former Prime Minister of the United Kingdom, David Cameron, explains the need for sound advice perfectly: “My view is, the most important thing as prime minister is trying to make the right judgments. To make good judgments, you need good advice; you need good principles, and you need a clear head, and you need to have a sense of equilibrium.”
Investors and private equity firms need advice for the same reasons as politicians — to expand their thinking, get out of the weeds, and build their circle of trusted advisors. Across private equity, PE consulting firms offer services that are designed to lead decisions and ultimately make your job as an investor easier.
Five Ways Private Equity Strategy Consulting Can Help
Get to yes or no faster
In the due diligence phase, the right private equity advisor will change how a PE firm views an investment, ultimately delivering the answers and confidence needed to evaluate a deal.
In a recent engagement, Apex Leaders had a client in the IOI phase of an investment in a marketing workflow collaboration based software. Our client wanted to know a number of things, including how the creative process works without the software and whether this software offered something different from other options. To get the answer they needed, we connected them with experts that understood and used similar products in their day-to-day life. In the end, the answers helped them decide to pass on the opportunity.
Coming to an informed decision often requires outside expertise. It requires gathering insight beyond quantified data in a market research report. Private equity strategy consultants rapidly vet, prepare, and introduce you to both subject-matter experts and industry leaders.
Provide an easier assessment of market patterns
When evaluating market trends for new investments in private equity, firms are facing increasingly challenging circumstances and tighter decision-making timeframes. A private equity consultant will connect you with experts who have in-depth knowledge in unfamiliar markets. l These experts help refine sector theses and evaluate live deals during due diligence—enabling your firm to move quickly, when the right opportunity comes along.
In one such instance, a private equity firm wanted to make its first investment in the rapidly growing and ever-evolving drone technology. While the opportunity excited the firm, they didn’t have a firm grasp on the market, so they turned to Apex Leaders for an investment thesis project, connecting them to experts who could help them understand market potential and pitfalls. The conversations they had with experts in the drone industry helped them identify an opportunity in drone racing and led them to pursue the purchase of a key portfolio company more aggressively.
An investment thesis sprint, guided by the right industry leader with broad market and operational knowledge, helps assess market patterns, confirm business assumptions and identify an investment strategy within clearly defined industry sweet spots. This process often leverages real-time market analytics to validate emerging trends and inform strategic direction. These experts help your firm position itself as a prepared (and preferred) buyer in the eyes of potential sellers.
Build a refined market strategy and advance their portfolio growth
During the post-transaction period, a PE portfolio manager’s number one objective is to drive sustainable growth over the life of the investment. To do so, they rely on the board and management teams at portfolio companies to steer the company’s direction.
However, private equity portfolio companies don’t always have the necessary in-house operations and strategic resources to define the appropriate initiatives to drive growth.. By turning to private equity consulting firms, portco leadership teams gain access to both industry leaders and functional subject matter experts who help refine growth strategy and guide initiatives like consumer insight studies, new end market evaluations, as well as addressing regulatory concerns within the industry.
When sales are plummeting, it can be challenging for firms to assess all internal and external factors contributing to the loss. When a private equity firm found its sales dropping, it turned to Apex to find an expert who could advise on market potential and ultimately deliver a direction for its sales team. By connecting with the right private equity experts, they found a path to new potential customers, a sales strategy, and a long-term relationship with a game-changing advisor.
Expert advisors help management teams drive growth, enhance optimization, and seize market opportunities, ultimately increasing the return on investment.
Build a stronger board/management team
As companies mature, their management team and board members needs evolve. Experienced outside directors on the portfolio company boards enrich market analyses, provide operational expertise, and accelerate value creation. Finding the appropriate outside director can be tricky, and a good private equity consulting firm will point you in the right direction.
An Apex private equity client who holds an investment in a cardiovascular medical device company needed a new board member to help navigate FDA and CE regulatory processes as quickly as possible. We connected them with several high-quality candidates, and the firm ultimately selected one to sit on this board.
Finding the right person quickly is tough — especially when looking for candidates outside your network. A PE consulting firm can help identify uniquely tailored experts who complement the strategic direction and pair well with existing board and management teams. Whether you need a regional operator, a managing director, or a global leader with multinational experience, the right fit can be a critical piece of growing a portfolio company.
Connect you with the precise answers that matter for your decisions
In PE, it isn’t always possible to predict the opportunities, questions, or needs that will arise. As your needs evolve, building relationships with industry luminaries can help evolve your strategy and ensure you have industry experts on speed dial when you need to quickly vet an opportunity.
By tapping into the power of private equity strategy consulting services early, you’ll establish a trusted bench of expert consultants. Private equity firms that work with Apex Leaders build their own networks as they continuously add new advisors to their Rolodex. Once Apex connects an expert to your firm, those advisors are yours to use as you see fit, with many of our clients utilizing experts for subsequent questions and projects.
Strengthen Your Deals with Private Equity Strategy Consulting
Looking to make informed investment decisions? At Apex Leaders, we specialize in serving private equity firms throughout the investment lifecycle. We help private equity clients invest with conviction. Our private equity advisory services connect you with the right experts with deep industry knowledge to help navigate your next deal. Contact us today to get started.