GP longevity requires careful recruiting – AVCJ Forum

Jun Tsusaka, CEO of Japan-based mid-cap buyout firm NSSK, emphasized the importance of shared goals and principles, although this is not to be carried out at the expense of diversity. Indeed, inclusive hiring is a way of fostering a network that is self-sustaining in terms of sourcing the next generation of talent.

“It has to be an organization where people are proud to work, and where people want to wake up every day and make a difference,” said Tsusaka, who recently took on the role of chief talent officer.

“You want to have an organization that is deeply embedded in various aspects of the community for recruiting talent – from college grads and business school grads to proven industry executives – or taking people from different industries and converting them into investors through training and education. If you can do that, you have the basis to build a business for not just 100 years but 500 years.”

Diversity can be difficult to achieve with a small team in a small market, however. CPE Capital, an Australian middle-market GP with about 20 investment professionals, aims to make up for this disadvantage by diversifying hires according to functional expertise. Deal origination, negotiation, and EQ are the core skills being targeted but softer, personality-based traits are reviewed as well.

“What we’re trying to do is create a repeatable business model by reducing the dependence on any one individual,” said Jeremy Stevenson, a managing director at CPE. “For a GP to be truly sustainable, it needs to go beyond a group of individuals and move to an organization that can bring people through in a culture and survive the departure of any one of those people.”

Global firms follow this approach as well. CVC Capital Partners, for example, traditionally hires around the region based on local language and cultural capabilities but that this is increasingly being layered with a lens of industry and functional expertise.

Alvin Lam, a principal at CVC, noted that this must be a gradual process. His firm has seven senior executives in Asia, five of which have been on the team for at least 15 years.

“When you’ve worked together for so long, you develop trust with each other, and so it’s not something that can be built overnight,” Lam said. “Once you have that, you have to be very conscious of building the next level of managers and partners.

Hong Kong-based Shaw Kwei & Partners, founded as a growth capital business in 1999, initially hired based on financial analysis skills and accounting knowledge. When the firm shifted to a buyout strategy around 2010, it started seeking capabilities such as HR, sales development, and facility management. In more recent years, talent targeting has further diversified into brand building, marketing, and digitalization.

“We need people that are action-oriented, people who get things done and do it quickly. Secondly, we need people who are intellectually adventuresome. More than just having curiosity, they are aggressive in trying to learn about things. They’re hungry for knowledge and looking for new ways to do things,” said Kyle Shaw, a founder and managing partner at ShawKwei.

“Third would be probity, which speaks to things like honesty and decency as a human being. In our industry, you need to have a certain amount of honesty with your colleagues, portfolio company management, and LPs. If you adhere to that sense of probity, I think that will stand the test of time and make the difference in being a successful firm.”

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