How to hire and retain strong executive leaders in a newly acquired business

For private equity firms, strong leadership is one of the most important growth levers in any portfolio company investment. Yet after an acquisition, it’s not always obvious who to hire first, or which current employees to retain.

New owners and private equity firm leaders balance multiple priorities at once: stabilizing operations, integrating systems, aligning culture and identifying opportunities for value creation. In that environment, defining a cohesive talent strategy, especially without a dedicated internal HR function, can feel like a daunting task.

Below, we outline where leadership decisions tend to matter most in the early stages of ownership and how to approach them deliberately.

Find and protect star players

The most successful sponsor-backed acquisitions find and reward skilled team members by bringing them into the process rather than sidelining them.

These “star players” can exist at any level of the organization. They may be top-performing salespeople, deeply trusted operations leaders or informal cultural beacons who hold teams together. In many cases, these individuals are legacy employees with a strong personal brand and a steady track record of success.

Their buy-in is critical to the success of the acquisition. These individuals understand how the business runs and where friction points exist, sometimes more intimately than ownership. Losing them early will slow down momentum and create unnecessary disruption across the employee base.

Acquirers should strive to support star players by communicating investment plans clearly and checking to ensure their work remains as undisturbed as possible during the transition. They can also be brought into strategic planning sessions, as appropriate, in an advisory capacity.

Doing so preserves institutional knowledge and signals that you’re being thoughtful about the existing strengths your new portfolio company has built over the years.

Establish strong finance and accounting leadership

In newly acquired businesses, the largest and fastest value opportunity often sits within the finance and accounting function.

Installing strong executive-level finance leadership helps ensure revenue is captured accurately, strategic opportunities are prioritized and the fundamentals of month-end close and day-to-day financial activities are reliable. Without a strong financial foundation, your visibility into the business is too hazy to make bold changes.

Depending on the size and complexity of the organization, your first step toward financial success may begin with hiring a rock star CFO, FP&A leader or controller.

CFOs especially play a central role in portfolio companies. They serve as the primary liaison between investors and the operating team, translating strategy into execution and performance into insight.

In many organizations, the CFO role is now viewed as equal in importance to the CEO. Getting this hire right early in the ownership cycle creates clarity and trust across the business, and they’ll often have the leadership chops to help build a team beneath them.

Ensure the CEO can unify the organization

Finding the right CEO can set the tone for the entire investment period.

Their ability to inspire team members and work shoulder-to-shoulder with the star players you identified earlier helps ensure expectations are aligned and execution is consistent.

CEOs in sponsor-backed environments also serve as a critical window between ownership and the company. They must be comfortable communicating in the boardroom while remaining credible with their employees. Leaders who can move fluidly between those environments are better positioned to earn trust and drive results.

In some cases, pairing the CEO role with a more targeted background, such as strategy, operations or human resources, can further strengthen the organization as it scales. What matters most is that the CEO brings cohesion to a business navigating change and has the people skills to win over the toughest of rooms.

Use human resources as a value driver

Strong HR leadership ensures people are contributing to the best of their ability and have the resources they need to thrive. Private equity investors are beginning to shift their view of this function from a back-office necessity to a true value driver.

The right HR leaders are essential to retention and recruitment efforts, and they can help identify which legacy employees are critical to keep, where gaps exist and which new hires are truly mission-critical to the business.

When aligned closely with executive leadership, HR can reinforce culture, support integration and build systems that scale alongside the company. For private equity firms focused on long-term value creation across a lean portfolio team, this function deserves a seat at the table early.

The bottom line

Building the right leadership team after an acquisition is less about replacing people quickly and more about making intentional decisions that professionalize the business and show respect to the foundation in place.

Protecting star players, strengthening finance, appointing a CEO and elevating human resources as a strategic function all contribute to smoother integration and stronger financial returns.

For private equity firms, making these leadership hires early (and getting them right) can be one of the highest leverage moves of the ownership cycle. When leadership decisions are made thoughtfully, newly acquired businesses are better positioned to reach their full potential.