Advancing Age of PE Execs Raises Succession Questions
Advancing Age of Private Equity Executives Raises Questions About Succession
According to the recent Wall Street Journal article last week, "few major businesses are led by 66-year-olds who won't even hint at who will succeed them or when they might step down." For private-equity investors, the issue of succession is of growing importance as many clients trust their "Graying Barbarians" for years of good returns, but at the same time, are expressing concerns about how the firms are planning the future.
Warren Buffet, in the latest issue of Vanity Fair Magazine detailed how succession "is all we talk about." "Investors care a lot about who will succeed the kings of private equity, it's a big issue," says Mario Giannini, CEO of Hamilton Lane, a firm that advises private-equity investors and makes investments in these firms.
Robert Long, CEO of Conversus Asset Management, an investor in Private Equity firms, says he is avoiding firms that haven't done a good job planning succession, and is spending more time focusing on "Key Man" clauses in partnership agreements.
Key Person Disability Coverage: Benefits up to $125 Million/Insured
Often in our niche, we observe sophisticated insurance advisors securing large amounts of key person life and disability on key executives of portfolio companies acquired in private-equity transactions - at times overlooking to protect the ultimate rainmakers. As these "barbarians" age, PE firms shift their decision making powers to their successors to groom the next generation of rising stars. With Exceptional Risk Advisors' unique ability to provide key person disability benefits with limits up to $125 million per insured, and the focus of succession planning in the public eye, now is the time to explain to your clients how key person life and disability can be used as an effective planning tool during private-equity succession planning/transition periods.
Whether you are working with private-equity firms, hedge funds, publicly or privately held businesses, or additional organizations whose success is parallel to the success of their leader(s), Exceptional Risk Advisors provides Key Person Disability coverage to protect these entities from the financial losses of a disability to their top level executives - a risk 2.2 to 3.5 times greater than the risk of death during a person's working years.