by: Kay Francoeur
Corporate development and M&A roles are highly sought after within private equity firms due to the strategic value they bring to these organizations. These professionals play a crucial role in identifying, evaluating, and executing on investment opportunities that are a vital source of inorganic growth for PE firms.
There are more Corp Dev and M&A roles out there, and the importance that is being ascribed to them is on the rise. The key drivers for this trend include the deal flow within PE, the systematization of PE playbooks, and a stronger emphasis on deal-making across the broader corporate landscape.
At ECA, where 85% of our clients are PE firms or their portfolio companies, we’ve noticed that Private Equity deal flow has either grown or kept relatively consistent. The PE playbook has become more systematized in such a way that prioritizes mergers and acquisitions. As the private equity market becomes saturated to the point where PE firms can no longer guarantee great returns on their investments just by playing the market right – e.g., buying and selling at the right time – they need to have more active, hands-on value creation and growth strategies. Acquiring the right targets is a great way to achieve these goals, contributing to a growing demand for experts in corp dev and M&A strategy.
We’re also seeing M&A become more important across the corporate landscape more broadly, beyond the PE world. As Malcom Lloyd, a Global Deals partner at PwC, has recently said, there are more strategic decisions being made to “enhance portfolio optimization, as dealmakers divest to free up capital to focus on acquiring capabilities and transforming core business areas through M&A.”
In addition to the high importance of corp dev and M&A within and beyond the PE space, professionals who are versed in these areas are also in high demand because of the diverse set of transferable skills and expertise they bring to the table. Evaluating investment opportunities requires an especially strong set of analytical skills, as well as well-developed soft skills such as effective communication and negotiation acumen in order to facilitate the successful execution of M&A transactions. Those who succeed in corp dev and M&A functions are all-around athletes able to both manage complex projects and work exceptionally well with a wide range of stakeholders, including legal and financial teams, investors, and potential acquisition targets.
For these reasons, we believe that demand for these strong “doers” and champions of inorganic growth will continue to rise for the foreseeable future.
Kay Francoeur is a Project Manager at ECA Partners. She can be reached at [email protected]