Hi Chris

I'm sure it's almost impossible to generalise, but for what it's worth, my past experience and observations are that they are usually very very financial-results-oriented and about maximizing these, so that many would be off the maximum scale if rated for concern for results and the other extreme as regards concern for people rating. But so are a lot of other employers - some are enlightened enough to know that disregard of the best interests of their people doesn't make good business sense - but it isn't quite as simple as that, really, especially with opportunists and those without any longer-term stake in that particular sector. If the people in charge of your company aren't totally heartless and ruthless then I think you can count yourself fortunate. Many of the brighter ones in such roles I think realize that it's best to look after people too - especially the better-performing ones amongst their people - but there are still plenty who don't and never will. But I think that applies to working in the private sector generally and not necessarily to working for private equity companies. However, that said, personally if a potential employer was eg private equity or USA-based I'd be especially anxious to seek out indications about their particular ways of running things.

As David has already suggested. PE can be positive or negative. What was your impressions during the interviews, were they talking about slashing all costs to sell within 6 months or did they want to grow the company and still make a healthy profit?

PE comes in a variety of forms and it's worth knowing what kind you're dealing with.

There is the simple loan. The investor provides the business with a loan in return for interest on repayments. This provides the investor with the least control but the safest returns. Generally, the lender expects to have some influence on the business (such as a NEXD), but otherwise the business continues to run itself with minimal interference.

There is the limited equity purchase, in which the investor purchases equity in the business. This is the "private equity" in PE, because generally the equity is not available for public purchase, but in a limited equity purchase, the investor buys less than a controlling interest, leaving the business founders still with majority control. The investor has a much greater level of control, likely with two or more seats on the board and potentially a veto over business critical decisions such as acquisitions, capital investment or appointments at executive level and above.

Then there is the controlling equity purchase. This is the most publicly-known of PE investments, because it is when the investor buys a controlling interest. This usually means either purchasing a controlling interest in a private limited company with a view to taking it to IPO, or buying up publicly-traded shares in a public (but failing) company.

In these situations, the PE investor's job is to maximise the market value of the business so that they can, as quickly as possible, sell on their equity at the largest possible profit. Note that the PE investor doesn't necessarily want the business to be *profitable*. They want it to be *valuable*. And value on the market can rest in a lot of things, of which profit is only one. For example, it may be that they want to build up the value of the business's order book, or inflate the market value of its intellectual property, or any one of many ways in which a business can be made to look valuable without actually being profitable (q.v. Twitter, Truth Social etc).

Working with a PE-backed business can be exciting - in the same way that a ride on an under-maintained roller-coaster is exciting. You're never quite sure if those hair-raising bumps and shakes are intentional or a sign that the whole thing is about to fall apart. It can be a great opportunity to add value and get insight into the inner workings of a business, as extraneous parts are rapidly stripped away to maximise value. But it can also be intensely frustrating to see good people and resources wasted by a short-termist mentality that is fixated upon a number that is otherwise meaningless to everyone in the business.

I've worked for a number of PE backed businesses. I think the questions you should be asking is around what involvement they have at a board level and how that trickles down to the rest of the business. They obviously want to maximise their investment: does this mean that they want to see absolutely everything all the time and have real influence over the direction and activity of the business? Or are they happy to let the management team get on with it? This possibly also speaks to a certain level of competence/influence that your CEO will have. If they're heavily involved, this may limit your own autonomy.

If the view is to sell at some stage, it'd be worth having conversations around when that's likely to be and what they're hoping the company will look like to be attractive at that point. How does the people piece fit into that - is it 'attracting and retaining top talent' or is it 'keep it super lean so costs are lower'? If they're anticipating a sale, what will your role be with any kind of due diligence / TUPE at that point? It might be a long way off but perhaps that's experience you don't have that might be appealing. Additionally, if it's about a sale, how transparent are the management team about that with the wider business? Are your people clear (and ok) with what they're working towards?

None of these are right or wrong answers; it's just figuring out what the make up of your role will be so you can make an informed decision.

In reply to David:

Hi David - thank you for your feedback, I appreciate it. The company seem to offer their staff pretty generous benefits, and have a strong sense of employee voice with various committees etc. It seems the PE backers see the value in treating the people well (on first glance, that's the impression I get anyway)

In reply to Steven :

Hi Steven - thanks for your response. During the interviews they were talking about growth, a lot. There was no talk or suggestion of selling the company.

In reply to Robey:

Thanks, Robey for your response - it is extremely helpful. I appreciate it. I got the impression that they are very focused on long-term growth. They did say, however, that their PE backers do influence their strategy - and even spoke about how they approved their implementation of various staff committees - which seems like quite a low level thing to get involved with.

That said, it did seem like a company with healthy values, high reward for all staff and a strong sense of employee voice. Overall, my impression is positive but I am still slightly wary of this kind of set-up

In reply to Alys Martin:

Thanks, Alys for your insight. I had the final interview today (4 in total!) - but I have requested a further chat with the CEO. Your suggestions for points to discuss are very useful. I will certainly raise them - thank you

In reply to Chris:

Good luck - let us know how you get on!