More than half of chief executives (58%) are replaced within two years of a business securing private equity investment, according to AlixPartners second annual Private Equity survey.
The research, which surveyed more than 100 private equity groups and company chief executives, found that 73% of chief executives were replaced across the lifecycle of an investment.
More than half (55%) of private equity owners said that a “lack of fit with strategic direction” as the reason for replacing a chief executive.
The key areas of disagreement between chief executives and private equity owners were found to be – pace of change (78%), performance targets (50%) and frequency of contact (31%).
It found that 31% of chief executives prefer scheduled monthly meetings, while only 3% of private equity owners agreed.
A track record of success was the main thing private equity firms were looking for in a chief executive of portfolio companies (73%), followed by experience with similar challenges (55%), and people leadership skills (46%).
It found that 50% of private equity owners find culture fit the most difficult factor to assess.