Frequently Asked Questions for Private Equity Clients
Who is Notch Partners?
Notch Partners helps private equity investors to establish and nurture relationships with deal-capable CEOs in order to drive proprietary deal flow, gain competitive advantage in auction processes, hire in-house Operating Advisors, and fill the “talent pipeline” for future portfolio company needs for long-standing private equity buyout clients. Notch also provides traditional executive search services, focusing on CEOs, CFOs, board members, and other C-level executives. The firm was founded by Andrew Thompson and Mei-Mei Tuan in 2002.
Who are your clients?
Our clients include a select set of institutional private equity investors. These firms control funds ranging in size from $300 million to over $25 billion, and they invest across all sectors globally. Our clients view forming relationships with Deal Executives as a central aspect of their competitive differentiation.
How does Notch work with private equity firms?
Prior to entering into a client relationship, we take the time to understand our client’s industries of interest, investment parameters, and approach to working with executives. Depending on client needs and the type of relationship we establish with the client, we may begin making targeted executive introductions immediately across a range of deal situations. Over the course of several introductions, we use our client’s reactions and feedback to adapt our approach to the individual working style of our client.
Our client relationships are characterized by frequent informal interactions. We believe that we best serve our clients when we can develop a deep understanding and internalize each client’s investment approach, priorities, and biases. Our services are customized to each client’s preferences; as such, our work differs widely across our clients. Our clients consider Notch to be an extension of their firms, as we are brought into multiple initiatives and deal situations during the course of a long term working relationship.
What services other than introductions does Notch provide?
We view identifying and introducing executives as just a first step, though for busy clients, an important one. Our most significant value is imparted in two ways: first, we work with executives to cultivate their deal ideas and to help them develop management-centric “angles” on auction situations; and second, we work with executives and our clients over the course of the relationship to ensure that our clients extract maximum impact from each introduction we make. We understand what private equity clients are looking for, and we help our executives deliver it. Over the course of the months following an introduction, we remain proactively involved, to keep promising relationships from falling through the cracks.
We also provide our clients with CEO and executive team recruiting, executive program development, and access to functional/domain experts. To learn more about the services we provide, please visit our Client Center section.
How many executives do you work with?
The Notch Network consists of over 3,000 CEO-level executives who have exceptional track records and are interested in creating meaningful and productive relationships with private equity firms. At any given time, Notch is actively engaged with 50+ executives who are currently working with one or more of our clients, and an additional 20-30 executives who are working to develop deal ideas to present to investor clients.
How do you source your executives?
We source our executives in several ways. Through extensive research, we regularly reach out to CEO’s who are leaders in their industries and have a strong track record of earning returns to stakeholders, with a particular emphasis on executives with private equity backgrounds. We regularly address groups of executives, with the objective of educating them on how to make themselves valuable Deal Executives for our clients and meeting new executives who are already actively involved with deals. Finally, and most gratifyingly, we receive frequent inquiries from executives who are referred by individuals we have worked with in the past.
Is there a typical Notch executive?
The executives who we introduce to our clients do share a number of characteristics, the most important being that they have achieved outstanding results in growing profitable businesses. We work closely with executives who we feel, with Notch’s advice and counseling, are likely to provide our clients with deal ideas, specific acquisition targets, or a proprietary angle on an upcoming deal. In addition, most Notch executives have deep experience in one industry, and a history of operating success which culminated in significant P&L responsibility. For a more complete picture of a Notch executive, please see our Deal Executive section.
What does Notch provide its clients that they can’t get from a recruiter?
Our work is not driven by job openings. While a traditional headhunter seeks to fill an open position, we are helping our clients to leverage executive relationships to create new opportunities or maximize existing ones. While such deal situations may result in jobs for executives (and indeed that is often the executives’ main motivation, along with wealth creation), our focus is on increasing investment returns by creating executive relationships that add value during all phases of our clients’ deal cycles. Further, while a headhunter works on a transactional basis, we work with our clients continuously over time. This results in a deep understanding of our clients’ unique needs and approaches to private equity.
Are you deal brokers?
We are not deal brokers. While we often bring deal opportunities to our clients, our approach and function are in many ways very different from most investment bankers and deal-brokers. Where they lead with companies, Notch’s overtures are always executive-centric. While our executive introductions are often associated with deal situations, our sources of value-add are broad and varied. Our success is measured by the ability of our clients to leverage executive relationships in multiple ways and at different points in their deal cycle. Sometimes the outcome is a proprietary transaction; other times executive relationships enable transactions or allow our clients to rapidly conclude that an investment opportunity is unattractive through superior intelligence or expertise. Finally, we work on behalf of the investor, not the seller.
What form do the relationships between investor clients and Notch executives typically take?
There are number of ways an operating executive can get involved with private equity firms and their portfolio companies. If there is sufficient common ground and mutual interest to engage, at the outset, a relationship can take the form of an “executive-in-residence” position (paid or unpaid). In some cases, our clients may offer an executive the CEO role in a newly created company with the mandate of making acquisitions in their industry. Some firms take on “Operating Partners” who can engage in a range of activities, including deal sourcing, thesis creation, deal evaluation and generally rounding out in-house financial perspectives with their operational expertise. In cases where there is real interest on the part of the client, but in which no formal role makes sense, Notch helps maintain an ongoing dialogue with the executive so that the client can quickly access the executive when the need arises.
How does Notch work with its executives?
Working with Notch offers a different type of experience which many executives find compelling and refreshing. Rather than taking a passive backseat approach and waiting for the “ideal” position to materialize through a traditional job search, our executives work independently and with our private equity clients to create opportunities, through private equity deals and firms, which best suit their interests and capabilities. While the open-ended nature of the process may be unsettling to some, our executives take comfort in the fact that Notch is continually involved to maintain a robust feedback loop and to ensure that no meaningful relationships get lost in the shuffle. To many of our executives, we have become trusted advisors and confidants.
How does Notch get paid?
We are on long-term retainer with our private equity clients. Preferred Clients receive a high volume of deal-oriented executive introductions, driven by Notch’s proactive efforts. Notch provides Preferred Clients with an array of customized human capital services, based on their needs. In addition, for Preferred Clients, retainer payments are netted against success fees related to hiring executives and completing deals.
In select circumstances, Notch will enter into fee arrangements with non-preferred clients for discrete projects.