Building a Private Equity Portfolio Talent Function

This guide examines the development of talent functions within private equity (PE) firms, emphasizing the importance of human capital in value creation for portfolio companies. It outlines the increasing trend of establishing dedicated talent leaders who focus on optimizing human capital practices specifically for portfolio investments. The document presents findings from an assessment of 50 top private equity firms, revealing that 58 percent now have a senior portfolio talent leader, a significant increase over the past five years. It details the roles and responsibilities of these leaders, which vary based on investment strategies and firm needs. The guide highlights the growing involvement of portfolio talent teams in the deal cycle, particularly in pre-deal talent underwriting. It also discusses the diverse backgrounds of talent leaders and the importance of alignment with investment strategies. Furthermore, the document addresses the scaling of talent functions, measuring success, and recommendations for firms to enhance their talent strategies, ensuring a robust approach to human capital management in private equity.