Author: Gerald O'Dwyer

Private equity (PE) firms in the lower middle market (LMM) are facing unprecedented headwinds. Firms that acquired companies 2-3 years ago are now dealing with rising interest rates, inflationary pressures, labor shortages, and supply chain disruptions. Meanwhile, firms that have made acquisitions in the last six months are grappling with high capital costs, uncertain valuations, and the looming threat of a recession. In both cases, there’s one common thread: having the right talent in place is essential to navigating these challenges and achieving a successful exit.

At Blackmore Partners, we’ve spent the last 25 years operating as Exec1st investors, placing talent at the heart of everything we do. With a vast network of over 60,000 executives in our database, 28,000 first connections on LinkedIn, and 35,000 executives following us, we’ve honed a talent-first approach that provides unparalleled access to leaders who can drive transformative outcomes. Here’s why our talent search capabilities are the key to unlocking better exits for PE firms in today’s environment.

The Talent-First Approach: Blackmore’s Edge in Private Equity

In the world of private equity, successful exits are built on talent. It’s not enough to acquire companies and apply financial engineering. The right leaders — people who can navigate operational, financial, and market complexities — are critical for maximizing returns. Blackmore Partners, with our deep roots in private equity and 25 years of talent-focused investment, understands this better than anyone.

Why Talent Matters More Than Ever for PE Firms

PE firms that acquired companies 2-3 years ago are facing a completely different macroeconomic environment today. Interest rates have risen, making debt servicing more expensive. Inflation is driving up costs for goods and wages, squeezing margins. Valuations have softened, creating uncertainty around exits. At the same time, newly acquired companies are wrestling with labor shortages, high capital costs, and economic instability. The challenges are myriad — but the solution lies in finding leaders who can steer these companies through turbulent waters.

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This is where Blackmore’s 25-year history of investing in talent-first strategies sets us apart. Unlike traditional private equity firms that focus on financial engineering, we believe that the right leadership team is the foundation of any successful exit.

Blackmore’s Talent Network: 60,000 Executives and Counting

Our access to top-tier executive talent is unmatched. Over the years, Blackmore has cultivated a network of over 60,000 executives across industries, each with the experience and strategic insights necessary to drive value creation for portfolio companies. Whether it’s a CFO with private capital experience or an operational leader adept at supply chain management, our network has the talent PE firms need to navigate today’s headwinds.

Additionally, our 28,000 first connections on LinkedIn and 35,000 executives following Blackmore offer a deep pool of relationships and expertise. These connections allow us to quickly identify and place executives who align with both the immediate operational needs and the long-term exit strategies of our clients. In an environment where finding the right talent can take months, our network dramatically shortens the hiring timeline, giving PE firms a competitive edge.

Exec1st Investor-Operator: Why Talent-First Drives Better Exits

Blackmore’s Exec1st Investor-Operator approach is rooted in the understanding that talent is the most important factor in determining the success of a portfolio company. When we help PE firms hire, we don’t just fill a position — we align the hire with the company’s investment thesis, culture, and exit strategy. This means that every executive we place is strategically positioned to drive the company toward a successful exit.

Here’s how our Exec1st approach works:

For example, a manufacturing company that was transitioning from family ownership to private equity control needed a leader who could manage both operational excellence and cultural change. We placed a CEO from our network who was not only adept at optimizing manufacturing processes but also understood the importance of building a high-performance culture. The result? The company increased EBITDA by 15% in two years, positioning it for a more lucrative exit.

Addressing Today’s Specific Challenges with Talent

PE firms that acquired companies 2-3 years ago and those making acquisitions today are facing very different challenges, but they share one common need: the right talent to drive success. Here’s how our talent-first approach applies to these distinct scenarios:

• For Firms Acquired 2-3 Years Ago: Rising interest rates, inflation, and labor shortages require experts in debt restructuring, procurement, and cost management. Blackmore’s network includes professionals with these skills, ensuring that companies facing squeezed margins can find the talent they need to stay profitable.

• For Firms Acquiring in the Last 6 Months: The high cost of capital and uncertain valuations demand CFOs who can adapt financial models to the current environment, as well as turnaround specialists who can stabilize newly acquired businesses. Blackmore’s deep bench of executives offers exactly this expertise, giving PE firms a significant advantage in an uncertain market.

Conclusion: Talent is the Key to Unlocking Better Exits

In today’s challenging market, private equity firms must prioritize finding the right talent to navigate operational, financial, and market complexities. Blackmore Partners’ Exec1st Investor-Operator approach, with its focus on talent-first strategies, offers a proven path to success. With 25 years of experience, a network of over 60,000 executives, and deep connections across industries, Blackmore has the expertise to help PE firms unlock better, faster, and more profitable exits.

At Blackmore, we believe that talent is the foundation of every successful investment. When you invest in the right people, you’re investing in great exits.

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