Private Equity firms, their deals and their portfolio companies are more than just the sum of their parts. They form a cohesive ecosystem in which every deal can learn from the previous deal’s diligence, and every portfolio company is presented with the opportunity to adapt good operating practices from the others.
But while PE firms understand this implicitly, their professional advisors need to as well. Consistent, joined-up high quality advice to a PE firm across its global breadth of deals and the portfolio often gets lost amidst a professional advisor’s geographically siloed internal structures, rigid functional reporting lines and financial accountabilities.
At WTW we’ve recognised this, and taken steps to address it. Our PE client service teams have been designed expressly to advise PE firms on risk management and talent cultivation across their deals and portfolio. This team taps into the WTW network of 45,000+ advisors across 140 countries, to identify and bring the most relevant resources to bear for the industry and geography of the deal / portfolio company being advised.
How does this work in practice across our PE clients’ deal cycles?
- In the diligence phase, our PE teams works across WTW’s regional M&A teams, country teams and sector Risk specialists / People advisors to conduct deeply localised risk, insurance, pensions and employee benefits due diligence.
- Between signing and close, we work closely with our PE clients to implement the recommendations of our diligence in advance of deal close. Where the deal is a carve-out, we market and place the target’s insurance programme in global insurance markets that provide the most optimal balance of coverage and pricing terms. On the People front, our consultants advise on retaining the right talent at the target, and communicating the deal across the target organisation in a way that keeps staff engagement, morale and productivity high
- In the first 100 days after the deal, our risk teams understand the PE client’s risk appetite to further optimise the newly-acquired portfolio company’s insurance programme. At the same time, People advisors seek to assess staff’s attitude and approach to risk management, ensuring that the portfolio company has a watertight risk culture
- Over the course of the holding period, we continue to act as the glue that brings together Risk and People advice across the entity and the PE client’s wider portfolio. Our advisors assist in designing senior executive compensation packages that are consistent across portfolio companies, build enterprise-wide reward programmes that seek the same goals and outcomes across the portfolio, harmonise employee benefits programmes, and seek to ensure that portfolio-wide insurance and risk continues to remain managed with no gaps in exposure
- When making add-on investments, our PE teams again work with the right geography and sector Risk and People advisors to ensure that the add-on is seamlessly incorporated into the buying asset’s insurance, pensions and employee benefits programmes
- Finally, during exit preparation, we build and demonstrate the exit readiness of the company’s risk management and talent landscape. The Risk specialists and People advisors who have been working closely with portfolio company ensure that the insurance programme is optimised, any potential to transfer contingent liabilities to insurance markets are explored, IPO insurance is in place where relevant, pension liabilities are laid out clearly, strong internal communication and change management protocols around the deal are established, ESG efforts are highlighted, and HR & Insurance vendor due diligence is conducted.
For more information, please do not hesitate to contact us.
