Modern service companies invest little in machines,
buildings or the company fleet. They thrive almost exclusively on
the ideas of their employees, their brand name and their agility.
As a result, a productive workforce is among the most important
value-creating factors. Even in traditional listed companies,
personnel costs are now many times higher than the cost of capital,
as Boston Consulting recently found. In view of the short
investment horizon, private equity portfolio companies rely heavily
on the support of their Chief Human Resources
Officers.
The Chief Human Resources Officer: a value driver for for
private equity
Private equity firms make temporary (majority) investments in
unlisted (private) companies with the aim of increasing their
value. After a short period, usually three to seven years, the
portfolio company is resold. During this period, the aim is to
increase the portfolio company's value, which is realised as
profit in the ultimate sale and
