Falling private-market valuations and a tougher fundraising environment are starting to weigh on private-equity executives — but those aren’t the only concerns driving more CEOs to seek guidance from outside coaches.
Personal coaches to private-equity executives report that their clients are increasingly worried about their impact on their employees, business, and even the world.
“When everything is up and to the right, everyone feels optimistic and gets along. As clouds roll in, these high achievers tighten up and tend to become defensive and argumentative,” executive coach Justin Doyle said.
And a storm is brewing — and in some cases has already arrived, Doyle said. His 20 private-equity clients are using sessions with him to vent their frustrations and worries, freeing up mental space so they can focus on solutions and be more productive at work.
Fundraising is definitely a concern, according to Peter Feer, an executive coach to more than 25 clients who he meets weekly or monthly. About 80 percent of his clients are senior-level workers at private-equity firms ranging from $2 billion to almost $40 billion.
“They are stressed that they are not going to be able to raise that successful next fund that’s larger than the prior fund. That definitely seeps into our conversations,” Feer said.
But executives are also thinking hard about other broad changes in their industry. Investment committees, limited partners, and employees increasingly expect firms — and their portfolio companies — to be more diverse, inclusive, and generally better places to work than in the past.
“They are required to have an impact at an enterprise, environmental, and social level,” said David Peck, head of the global executive coaching practice at Heidrick & Struggles. “It’s a lot on anyone’s shoulders and coaching can really help leaders step back and prioritize what matters to deliver on their strategy whilst aligning with their personal and organizational purpose.”
In recent years, Feer said executives are talking to him more about diversity, equity, and inclusion. Those subjects have become critical to recruiting staff and winning mandates from clients, especially state pension funds —and so it has become a part of coaching conversations, he said.
Private-equity executives get a bad rap as “rapacious, money-loving” professionals, but Feer said he’s experienced the opposite. His clients are struggling with things like returning to the office after realizing how much they liked working from home, practicing mindfulness, and developing healthy drinking and exercise habits to better cope with stress.
All of these issues have helped fuel greater demand for outside guidance, according to Peck, who reported an uptick this year in clients and teams seeking coaching globally.
“Organizations are understanding much better when investments in coaching make the most sense,” Peck said. “Coaching can unlock and help deploy the best of their highest potential and highest performing people, particularly those most committed to learning and developing themselves. We’re seeing that more and more these days.”
Other coaches interviewed by Institutional Investor likewise said their practices remained strong and were growing significantly.
Doyle said that inbound inquiries from prospective clients are up 50 percent compared to last year. Sloan Klein, founder of the eponymous career and talent development firm, said inquiries and her business have grown almost 30 percent this year.
“There are more people who need or want to find a new role within investment management. There is also higher anxiety around job security and disappointment or worry about compensation trends. More people are coming to me wanting to do work around making ‘stay vs go’ decisions than in the past,” Klein said.