A growing consensus among industry leaders underscores human capital's pivotal role as a primary value driver. This paradigm shift was the focal point of discussions at Private Capital Global's (PCG) Talent Summits held this spring in Austin, New York, and London. Operating partners, talent leaders, and portfolio executives convened to explore the integration of talent strategy into the core of investment processes.
This analysis draws upon perspectives from distinguished speakers and sponsors who participated in our talent summits, supplemented by industry research and market insights. The following examination integrates these diverse viewpoints to illuminate talent's increasingly integral role in the private equity value creation process.
PCG first gathered on the human capital topic in Austin, where we examined the transformative impact of artificial intelligence on human capital strategies alongside speakers Emily Azevedo of Mainsail Partners and Carter Tatum of Trinity Hunt Partners. Participants shared practical applications of AI in enhancing workforce capabilities, emphasizing day-to-day enhancement over the replacement of skilled workers. Discussions highlighted how AI tools are being leveraged for talent acquisition, performance analytics, and leadership development, enabling more informed decision-making and a culture of continuous improvement.
A notable trend was the expansion of the talent partner role within PE firms, emphasized by Ms. Azevedo of Mainsail Partners. Since 2018 alone, there has been a significant increase in Operating Partners dedicated to talent, reflecting the industry's recognition of human capital as a critical asset. Ms. Tatum shared insights on translating fund-level human capital strategies to portfolio companies, emphasizing the importance of aligning talent initiatives with overarching investment objectives.
"AI is fundamentally changing how organizations think about talent. It's enabling firms to move from reactive hiring to predictive talent planning to identify patterns, surfacing hidden leaders, and aligning human capital with long-term business strategy," said Joe Carbone, CEO of Eastward Partners. "We've made AI central to how we deliver insight and value to our clients. It plays a key role in helping us analyze leadership potential, understand organizational dynamics, and inform smarter, faster hiring decisions. Our approach blends proprietary technology with real-world judgment, ensuring that AI enhances rather than replaces the nuanced decision-making that executive hiring requires."
Building on this foundation, Mr. Carbone elaborated on their technological approach: "ECHO™ is Eastward's proprietary platform built to give our clients deeper visibility into talent markets and leadership performance. It helps solve the growing challenge of making critical people decisions without enough context or clarity. By bringing together data, analytics, and our own expertise, ECHO™ allows us to offer a more strategic, evidence-backed perspective on talent, whether it's evaluating executive potential, mapping future leaders, or understanding gaps in organizational capability."
He emphasized how this differentiates their practice: "Our clients are primarily in private equity and professional services, and they use ECHO™ to elevate how they think about leadership. It's part of what makes our model different. While many firms still rely on static networks and surface-level assessments, we've built a more dynamic, intelligence-driven foundation for executive search."
Kit Lisle, Founder & CEO of The Operators, provides a comprehensive framework for understanding value creation in the private equity context. "The practical implementation of value creation strategies presents unique challenges. "That should take care of the 'What,' but the 'How' is the tougher part," Mr. Lisle continues. "In a short period of time, historically, less than five years, management teams figure out ways to tangibly increase the value of the businesses they run. In my experience, there are only six ways to do this: 1) Alignment. 2) Operational Improvement 3) Financial Reporting, Data & Analytics. 4) Organic Growth & GTM Strategy. 5) M&A Strategy & Integration. 6) Exit Readiness"
The evolution of talent utilization represents a fundamental shift in how private equity firms approach human capital deployment. "The most significant trend I see is increased flexibility in use cases of talent and the recognition of talent as an asset, like dry powder, that is available, waiting to be utilized. At TheOperators.pe, we are focused on enabling private equity groups to build more flexible, stronger benches that enable them to scale up to solve a dilemma or take advantage of an opportunity. Offering PEGs a curated, vetted resource pool of experienced Operators, many of whom are available immediately, is a game changer," Mr. Lisle explained.
In New York, discussions centered on developing comprehensive talent playbooks for pre- and post-acquisition phases. The emphasis was placed on creating systematic approaches that could be scaled across portfolio companies while maintaining the flexibility to address unique organizational challenges. These playbooks serve as foundational frameworks that guide talent decisions throughout the investment lifecycle, ensuring consistency in approach while allowing for customization based on specific company needs and market conditions.
Jim Scarfone, CHRO & Operating Partner at MidOcean Partners and Matthew Eley, Managing Partner at ESP, underscored the necessity of systematic talent assessments during due diligence to identify leadership strengths and gaps. He advocated for replicable strategies across portfolios to ensure consistency and scalability in talent management. Scarfone's approach emphasizes the importance of establishing clear metrics and benchmarks that can be applied uniformly across different investments, while recognizing that each portfolio company's unique culture and market position requires tailored implementation strategies.
The development of these talent playbooks involves collaboration between deal teams, operating partners, and portfolio company leadership to ensure alignment on key performance indicators and developmental priorities. This collaborative approach helps establish clear accountability structures and communication protocols that facilitate effective talent management throughout the hold period.
Kathy Krone, Operating Partner at Paradox Venture Partners, has observed common pitfalls that derail human capital initiatives across portfolio companies. Drawing from her extensive experience in organizational transformation, she outlines four critical mistakes to avoid:
1. Leading with heavyweight assessment instead of clear value creation goals. Many firms start with heavy management evaluations or org health diagnostics before defining what "great" looks like for the next chapter. Start with outcomes: the 2–4 value creation levers, the 10–20% of roles that drive them, and the few lead indicators that predict success. Assessment only creates value when it's downstream of strategy. That's how you apply Pareto thinking to human capital—precision first, then depth.
2. Taking a scattershot approach instead of designing with intention. Human capital strategy should be minimalist and deliberate. What are the smallest set of changes, to the smallest set of people, that unlock the largest performance gains? Align strategy, structure, roles, rewards, and leadership—but with surgical focus and minimum effective dose.
3. Treating talent work as episodic. Winning firms embed human capital into the investment process. Data from diligence should flow into IC memos, portfolio reviews, org development, and exit prep. A unified system—not disconnected events—builds credibility and repeatability.
4. Solving new problems with old tools. AI and NLP are reshaping org design, role creation, assessment, and workforce planning. It's no longer simply "who should do the work?" It's "what work should be done by humans vs tech?" And, "How do we make better, faster decisions—and minimize cognitive bias?"
John Dahlgren of SBJ Capital and Frank Scarpelli of Sparc Partners emphasized the critical role of aligning deal teams on talent priorities early in the investment process. Their session illuminated how proactive talent assessments can mitigate risks and accelerate value creation post-acquisition. The integration of talent evaluation into due diligence processes enables firms to identify potential leadership gaps, cultural misalignments, and organizational capabilities that could impact the success of the investment thesis.
“Talent is one of the most predictive levers of deal success. When investors align early on leadership, culture, and organizational capacity, due diligence becomes more than validation.” said Frank Scarpelli, “It becomes a forward-looking strategy to mitigate risk and accelerate value creation from day one.”
Amid discussions on leadership during turbulent times, Lauren Gambardella, Director of Human Capital at Arsenal Capital Partners, and Derek Lokey, Senior Vice President at Teamalytics, highlighted the evolving roles of COOs and CFOs in navigating complex market environments. They examined how resilient leadership and effective talent management are integral to navigating market volatility and driving organizational agility. The conversation emphasized that effective leadership during uncertain times requires a combination of strategic foresight, operational excellence, and the ability to maintain team cohesion while making difficult decisions.
Derek Lokey's observations about Lauren's systematic approach to talent management throughout the investment lifecycle provide valuable insights into best practices. "I learned a great deal from Lauren's approach to talent at Arsenal. In particular, I appreciated how she methodically walked through the entire investment lifecycle—delineating the evolving talent-related priorities and opportunities at each stage, from diligence through exit. Her perspective reinforces something we see consistently in our work at Teamalytics: talent strategy is not a one-time initiative, but a dynamic lever that must be adjusted and optimized in lockstep with the broader value creation plan."
The discussion also focused on the critical importance of leadership resilience in today's volatile business environment. As Mr. Lokey noted, "What stood out most in our discussion was Lauren's insight into leading through turbulence. She underscored the importance of resilience in leadership—leaders who remain steady in their treatment of others, act decisively in the face of challenge, and unify their teams around a clear path forward. That kind of leadership isn't just nice to have; it's essential in today's environment."
Developing leadership capabilities in private equity-backed organizations requires a specialized approach that balances the urgency of value creation timelines with the need for sustainable organizational development.
Mr. Lokey emphasizes the direct connection between leadership behavior and business outcomes: "At Teamalytics, we approach leadership development in PE-backed organizations with a sharp focus on accelerating value creation. We know that leadership behavior—at both the individual and team level—has a direct and measurable impact on execution, culture, and ultimately, enterprise value. Our process begins with an extremely insightful, yet minimally disruptive assessment, providing objective, actionable insights into each leader and team's behavioral patterns, communication style, and decision-making approach. But we don't stop at diagnostics."
The integration of leadership development into business operations is crucial for success in the PE environment. As Mr. Lokey explains, "Crucially, we embed leadership development into the cadence of the business—tied to key milestones, metrics, and moments of inflection. And because PE-backed companies operate in high-pressure, high-change environments, we place special emphasis on building resilience, trust, and team alignment under pressure. Our goal is not just to make leaders more self-aware—it's to help them lead in ways that deliver results, inspire confidence, and build scalable cultures that can thrive well beyond the hold period."
The London summit explored the evolution of talent management at the fund level, examining how private equity firms are developing more sophisticated approaches to human capital across their portfolios. Melissa Moraes-Edwards, Head of Human Capital at Hg, shared her journey from focusing solely on recruitment to encompassing leadership assessment, organizational design, and development. She emphasized the importance of a holistic approach to talent that aligns with the firm's strategic goals.
Ms. Moraes-Edwards' evolution in talent management reflects broader industry trends toward more comprehensive human capital strategies. Her approach demonstrates how the talent function within PE firms has matured from transactional recruitment activities to strategic partnership roles that influence investment decisions and value creation initiatives. This transformation requires talent leaders to develop a deep understanding of business strategy, market dynamics, and the unique challenges facing portfolio companies across different sectors and stages of development.
Strategies for Portfolio Companies Amid Longer Hold Periods
Christian Trumpler, Portfolio Talent Leader at Partners Group, in collaboration with The Barton Partnership, discussed the recent hiring surge of Operating Partners and the emergence of Chief Transformation Officers. They noted that longer hold periods necessitate a focus on transformational leadership to drive sustained growth.
The trend toward longer hold periods has fundamentally changed the talent requirements for portfolio companies, shifting focus from short-term operational improvements to sustained transformation and growth initiatives. This evolution has driven demand for leaders who can navigate complex, multi-year transformation programs while maintaining operational excellence and team engagement. The emergence of Chief Transformation Officers reflects the need for specialized expertise in managing large-scale organizational change within the compressed timelines typical of private equity investments.
Jenny Collins, Founder and Talent Advisor at EXFI, has developed a systematic approach to talent optimization that has proven transformative across PE portfolios. Drawing from her experience with over 100 deals, Collins emphasizes that "PE firms applying financial-grade rigour to talent decisions outperform peers by 3-4× IRR. After 100+ deals, we've seen that winners deliver exceptional returns because the right people were in the right seats doing the right things—fast."
Her Three-Pillar Framework translates value-creation plans into precise talent strategies. "Strategic Talent Planning means working backwards from your exit goal to identify value-critical roles—we achieve 90% C-suite hiring success through scorecard-driven selection versus the industry norm of 30-50%," Collins explains. "Capability Acceleration involves creating performance environments where people develop faster than business demands require, surfacing leadership gaps 75% faster through continuous calibration systems. Scalable People Infrastructure prevents talent bottlenecks that typically extend hold periods by 6-12 months."
Collins advocates for treating culture as an operating system: "Big Tech's obsession with data-driven decisions and transparent goal-setting translates well to PE environments when individual OKRs are directly connected to investor-valued milestones. The key is treating culture as your operating system—without the right cultural foundation, none of the specialized functions can operate effectively."
Mark Farrer-Brown, CEO Coach at Fit to Lead, has pioneered approaches to cultural transformation in traditional PE environments. His methodology centers on what he calls "precision integration," recognizing that successful transformation requires nuanced cultural adaptation rather than wholesale imposition of Silicon Valley practices.
"The secret is recognizing that culture serves as the foundation for everything else—it's the operating system that enables all specialized functions to flow effectively," Mr. Farrer-Brown explains. "We don't impose Silicon Valley culture; instead, we identify and cultivate the specific mindsets and behaviors that will drive each company's unique value-creation plan."
The Edge-Groove-Home methodology combines challenging projects with structured reflection and targeted coaching to keep leaders in their optimal growth zone. "This creates buy-in because people see immediate personal development benefits while contributing directly to business outcomes," Mr. Farrer-Brown observes. "By streamlining people functions early and embedding systematic processes, we transform potential resistance into competitive advantage, turning skeptics into champions of the new approach."
Both experts emphasize that the most significant missed opportunity in PE is treating talent strategy as separate from commercial strategy. Ms. Collins notes, "When brought to the top table alongside financial decisions, people strategy becomes a genuine investment edge rather than just an operational necessity."
The compound effect of systematic talent management creates measurable returns. "Our Three-Pillar Framework creates a self-reinforcing flywheel: strategy drives scorecards, scorecards enable targeted hiring, performance data feeds back into strategy, and this compound talent advantage accelerates returns," Ms. Collins explains. "We've seen hold-period reductions of 6-12 months and IRR uplifts of 80-120 basis points when this system operates effectively."
The most successful PE firms, according to both experts, treat talent advisors as fractional CHRO teams: "They understand that in today's market, exceptional talent isn't just an enabler of value creation—it is the value creation. The firms that systematize this understanding will consistently outperform those that leave talent to chance."
A study by Bain & Company highlights that firms with disciplined talent strategies linked to explicit value-creation plans are more successful in achieving their investment goals. By embedding human capital considerations into investment decisions, PE firms can unlock new avenues for growth and differentiation. This integration requires a fundamental shift in how firms evaluate potential investments, moving beyond traditional financial metrics to include a comprehensive assessment of human capital capabilities, organizational culture, and leadership potential.
The most successful integrations of talent strategy into investment thesis development involve early collaboration between deal teams, operating partners, and talent specialists. This collaborative approach ensures that human capital considerations are factored into valuation models, value creation plans, and post-acquisition integration strategies from the earliest stages of the investment process.
