Mergers & Acquisitions spent a good deal of time recently speaking with senior female executives as part of our “Speak & Meet” conference series that included many of the winners to this year’s 7th annual Most Influential Women in Mid-Market M&A Awards.
Some of the key topics of discussion at both the MIW Speak (virtual) event and MIW Meet (in-person) event covered hot topics like environmental, social & governance (ESG) strategies, diversity, equity and inclusion (DEI) concerns, and the dealmaking environment in a Post-Covid world.
Here’s a collection of observations and views made over the two events by these senior executives:
Post-Covid Dealmaking Opportunities and Efficiencies
Dealmaking is becoming more efficient as professionals have adjusted to staying at home but still getting deals done during the pandemic. It also created new opportunities that wouldn’t have happened were it not for the tumultuous environment that Covid brought.
“With Covid happening there were so many really good companies that would never have needed our money except for Covid,” said Marilyn Adler, managing director of Mizzen Capital.
As an example, Adler described how the firm invested in an ownership group that operated over 25 successful sleep-away camps since the 1930’s that were in a cash crunch after its credit line was shut down by its bank. Mizzen invested $14 million, Adler said, enabling the camps to remain open. With things normalizing this summer, the camp operation has paid back a significant portion of its debt to Mizzen. Both parties are very happy, she said.
Heather Madland, a partner at Huron Capital, said the role that technology played in the pandemic has created new efficiencies in her business development role. “Zoom has become a verb,” she said. They now have “a two-step preindication of interest. We are getting to meet people virtually sooner in the process where you can build conviction earlier and do more work up front so that by the time you are at management meetings, you have met management twice already.”
By using tools like Zoom, the technology has led to breakthrough efficiency, she said, that leads to more effective predeal exchange of indication and information, all while leveraging time to create more quality dealmaking.
Nonetheless, great PE shops set themselves apart by the internal discipline they instill in themselves, according to Justine Mannering, managing director at Stifel.
“There are a lot of funds out there and what we find is that those funds that really distinguish themselves are the ones who’ve done the work long before a company lands on their desk. When I mean work, I mean they really understand the sector. They have a thesis around the sector. They know the companies. They know what the issues are and they know what the upside is for them.”
ESG Strategies
Many executives spoke about the need to move discussion about Environmental, Social and Governance ideas to actionable strategies.
Joanna Reiss, a partner at Apollo Global Management, explained how she advises others to think about ESG. “Try to make your culture and the individuals at your firm see it as a toolbox to create value rather than another reporting metric,” she said. “Implementing ESG is something more than just a public relations strategy.”
For Jeri Harman, founder, chairman, Avante Capital Partners, her firm focused on the social piece of ESG.
“I think most organizations focus on some aspects of ESG. For Avante our focus is on the diversity equity and inclusion part,” Harman said. “It’s an important part of our culture and gives us a sense of purpose. It is our way of really making an impact and has become an important part of our strategic initiatives and how we operate in terms of our we originate, how we recruit and how we retain people. It is truly intertwined with how we do business, which I think it has to be, to be successful.”
Diversity in M&A
Diversity, equity and inclusion is on the minds of many of the executives attending our events. Indhira Arrington, managing director and global chief DEI officer at Ares Management, said most firms have yet to make the inroads that should be expected of them by now, including her own employer.
“We are in a bad place with good company,” she said. The community really needs to think about this as an industry issue with industry solutions. “Having diversity and being able to harness the value of that difference is going to lead to better business outcomes.”
Heather Faust, managing partner and co-Founder of Argand Partners, echoed Arrington’s view.
“The idea of bringing people together with different backgrounds and perspectives does get us to a better outcome in our decision-making. It’s not actually just what it does within our firm but also the impact that it has in our portfolio companies.
“We founded our firm with the philosophy of [DEI]. We didn’t set out to necessarily build a DEI firm, but philosophically it was important to us,” Faust said. “For me this was a fundamental aspect of the business that I wanted to build. That goes back to earlier in my career. I am sure everyone has had good mentors along the way. When I was with McKinsey I met this amazing woman who really made sure we all had a voice. And that has really stayed with me throughout my career. For me it was about bringing together groups of individuals where you were getting diversity of thought and I think it has accelerated and society seems to be transitioning to a more progressive and socially aware view.”
