Buy-In Management Buy Outs (apologies for the title) seem to be the preferred route for institutional transactions...

It was very interesting to come across the following analysis of how management teams interact with new Private Equity owners during the first years of an investment.  So often the message from PE firms is 'who are we backing?' and it seems that the incumbent management alone may not be the answer after all.  It goes without saying that when a company is sold by private owners into an institution it will change - the reporting, access to capital, risk profile and expectations for growth all change very significantly.

From our own experience of PE buyouts the most successful scenarios post investment are when a new non-executive Chairman or hands-on FD comes into the business with the new investor to guide  and lead the sector experts that have been with the business and can provide the continuity of relationships with customers and suppliers.  In this scenario the incoming leader not only provides the interface between company and owner but also provides the coaching and guidance required to deliver on a new business plan which is necessary to increase growth.

The added benefit of this approach for the investor is that they open themselves up to many more opportunities where private shareholders may not have been able to create the 'perfect team' prior to seeking a sale.