…. Investors in private equity are constantly seeking to understand the elusive qualities that distinguish a high-performing CEO from the rest. Identifying these characteristics early can significantly impact investment outcomes.

…. Our recent report "Comforting delusion or expensive blind spot? The importance of management teams in mid-market private equity transactions", drawing on data from 94 investors across 50 UK private equity houses, highlights that investors attribute two-thirds (67%) of investment returns to management quality, which is not only very high but also represents a substantial rise from 58% in 2004.

…. In today's private equity landscape, investors seem to be doing less management due diligence using third parties than previously. This retreat from formal MDD often stems from fast-moving deal processes or concerns about affecting the investor-CEO relationship at a sensitive time. When diligence is done, it frequently focuses narrowly on referencing and individual assessment.

…. It’s a common scenario: a board meeting where financial targets are dissected, market trends are debated, and strategic initiatives are mapped out. Yet, often, the very engine driving these ambitions – the team and organisation – remains a shadowy figure, its inner workings unexplored. Why do boards mostly operate in the dark regarding team and organisational effectiveness, and why does it matter?

…. There have been various research reports in the UK and US suggesting that private equity generates higher returns than public markets, even when adjusted for risk and fees. However, those returns seem to have declined over time due to increased competition, higher entry multiples, changes in debt markets and the greater instability of major economies.

Most of us are familiar with the Pareto Principle, often referred to as the 80:20 rule. The idea, as captured in the graphic below is that a few activities are disproportionately responsible for a large majority of results. The implication, if we can identify the valuable few and take action to deliver them, is that we can achieve substantially better outcomes…

One way to define what Catalysis does with investors and companies is that we (i) help directors create executable strategies and then, (ii), make sure that the managerial and organisational underpinnings of strategy execution are in place. On the first point, we don’t identify the ‘what’ of strategy…