Navigating Private equity (PE) investment can be challenging for management teams, but with the right approach, you can not only survive but thrive in this environment. Here are some key insights which can help you make the most of the relationship with Private equity investors:

1. Influence the Buyer Decision

While shareholders prioritise financial returns, if you have a preferred PE partner, there are ways to influence the decision. Engaging early with a specific deal team, providing them more access, and working closely to de-risk the investment can build trust. This increases their confidence, possibly leading to a higher offer that aligns both your preference and the shareholders’ financial goals.

2. Understand the Investment Case and 100-Day Plan Early

PE firms base their investment decisions on a specific business case and a 100-day plan. Engage with these early to ensure the goals are achievable. If the plan is too aggressive, it could lead to unrealistic budgets and performance issues. On the flip side, you may have the chance to influence the Sale price and scope of the plan if you believe it's too conservative. Owning and shaping the 100-day plan from the outset is crucial to navigating the transition successfully.

3. Reassess Your Management Team

PE buyouts provide an opportunity to make difficult but necessary changes within your leadership team. Loyalty to underperforming senior members can hurt long-term performance. Take the chance to objectively review your team’s capabilities, and if needed, leverage the PE firm’s resources to get an independent evaluation and ensure you have the right people in place.

4. Build trust with the Deal Team

The deal team will initially trust you, but their backing has limits. Transparency is critical in maintaining trust. If issues arise, sharing them early allows for collaboration and shared accountability. A lack of transparency, however, can quickly lead to the loss of confidence and support.

5. Learn how the PE Fund Operates

A PE firm is structured with a deal lead who interacts with the CEO regularly, alongside more junior team members who may take up more of your time. These individuals may lack operational experience, so managing their expectations is key. Establish a close working relationship with the senior deal lead and leverage the experience of operating partners who act as a bridge between the PE firm and your company.

6. Manage EBITDA and Avoid Overcommitment

A steady EBITDA growth is expected, but the pressure to overcommit on financial targets is common. It’s essential to set realistic goals that balance PE expectations with what the business can deliver. While EBITDA is a major focus, there are ways to influence it through smart financial management. Engage an operating partner to align expectations and help protect you from overpromising.

7. Utilise Operating Partners Effectively

Operating partners, especially those with the right blend of corporate experience and deal team trust, can be invaluable. They can serve as a sounding board, providing strategic support and operational guidance. Building a strong relationship with them can greatly enhance your chances of success by ensuring alignment between management and the PE firm.

By focusing on transparency, strategic management of the investment plan, and leveraging the resources at your disposal, you can not only manage but excel in a PE-backed environment.

If you would like to discuss any of the points raised in this post, please email us on

info@harloworx.com