In a Drawdown article published yesterday, Silvia Saccardi in conversation with Dean Terry explore the rise of the diverse head of talent or chief talent officer (CTO) role within private equity, and the characteristics of ideal candidates.
The rise of CTO as a key senior role is a response to how the private equity industry is changing, with competition increasing and globalisation shaping the talent market. Some mid-market GPs are now seeking CTOs for the first time, and many more are in the early recruitment stages. As talent is wanted both internally and in a fund’s portfolio, the CTO role can vary in responsibilities and focus. The key skills, however, remain consistent across the bifurcations, and are as follows:

  • Ability to build a network
  • Willingness to promote a strong brand message to market leaders
  • Responsible for engaging with the bench of talent (both internal and external)
  • Proactive nature, which helps source valuable conversations
  • Accountability for the success of the GP or portfolio company
  • Able to understand the importance of organisational design
  • Analytical skills to identify any inefficiencies as well as key cultural dynamics
  • Ability to work under pressure and tight time constraints
  • A good communicator
  • Proficient in using and understanding data to enhance search processes
  • Possession of an investor mindset
  • Inquisitive and curious nature
  • Able to promote growth for the long term
Granted, it can be a challenge to source a candidate who possesses all the above characteristics, but those with most of them will be well-suited to tackle the variety of the role.

Dean's profile
In the view of Dean Terry, Head of HR and Legal Practice at PER, the role of the CTO is “primarily about centralising and growing the fund’s talent pool of executive-level candidates and appointing those individuals into the existing or new portfolio companies. Depending on the share, this can involve a full takeover by restructuring the C-suite members of that company. This can be achieved directly through the funds network, direct sourcing or through a collaboration with search firms. Throughout this process and beyond, the CTO will also work with the portfolio company from a talent advisory and people partnership perspective.”

Dean points out that one effect of firms slowing down their internal hiring processes is more demand in the current market for portfolio-focused CTOs than their internally-focused equivalent. Still, the focus of private equity firms remains on creating value through people management, no matter the approach they take.
Another focus of private equity firms has increasingly been D&I and ESG responsibilities, and the presence of CTOs makes a real difference to firms, allowing them to outperform those who are missing this role in their team. A talented individual in a CTO role is likely to improve data harnessing methods and implement unbiased recruitment practices, keeping the firm on track in actualising their values.

Read the Drawdown article