Idea in Brief
The Problem
Investing in leadership is often a long-term, resource-intensive endeavor, so it’s not surprising that private equity—a notoriously short-term, cost-conscious sector—has often overlooked talent development.
Why That Needs to Change
Longer holding periods and higher carrying costs are increasing the pressure on PE firms to drive higher operating returns from portfolio companies. That will require more-effective leaders.
The Solution
PE firms should hire and empower human capital partners, create and execute a talent playbook, assess talent more systematically during dealmaking, and encourage portfolio companies to make leadership development a higher priority.