The Collapse of Silicon Valley Bank: Implications for M&A Deals, Opportunities, and the Importance of Risk Management


The collapse of Silicon Valley Bank (SVB) has caused a significant impact on the financial industry and has triggered a discussion among M&A professionals about the implications of this failure. The closure of SVB has led many borrowers to move their accounts to other banks, with the bigger banks noting an influx of account open requests in the thousands since last Friday. Concerns over financial stability and inflation have also been raised, and market participants are speculating on whether the Fed will increase rates next week.

During the roundtable meeting, participants criticized SVB’s management for their lack of risk management and diversification. Members argued that the bank’s management had failed to unwind its positions earlier, despite knowing the Federal Reserve’s plans to raise interest rates. This failure led to a bad bet that became catastrophic for the bank, on top of the bank’s already concentrated depositor base in one sector.

The collapse of SVB is expected to lead to changes in the outlook on doing deals. The sentiment is that the appetite for doing deals remains, however, it’s predicted that we will see a decrease in investment committees’ appetite across the board for riskier deals. However, the collapse of SVB has also created some opportunities with the group noting, specifically as it relates to the work of independent sponsors, founder/owners are going to be more cognizant that multiples will have to come down and given that folks likely want to keep their money out of the banks, capital raising shouldn’t be heavily impacted.

In conclusion, SVB’s collapse has highlighted the importance of diversification and risk management in banking. Banks must be proactive in unwinding positions and monitoring potential market changes. Additionally, this event has shown that the collapse of a bank can have far-reaching effects on the financial industry, and market participants must be prepared to adapt to such changes.

Tell us what you think on LinkedIn, Instagram, Facebook, or Twitter! @opusconnect.

By Lou Sokolovskiy, Opus Connect
March 2023

The Power of Design Thinking: Olga Trusova Shares Insights on How to Succeed in a Hybrid Work Environment


Olga Trusova is a tech expert turned executive who has launched her own consulting firm, Blue Fig, that helps organizations jumpstart innovation using design thinking, lean and agile. She believes that design thinking can help many organizations innovate. Olga has experience leading an innovation function at a 100-year-old insurance company, AAA, and has also written a book titled “Calm Living” that leverages design thinking to set up the life you want for both work and life at home.

In a recent Zoom interview, Olga shared a case study with AAA that was forced to innovate when new startups like Hippo and Lemonade emerged and became competitors seemingly overnight. These startups were moving fast, creating products quickly, and testing them with consumers. They were disrupting the insurance industry in an unprecedented way. “[They were] eating some the big insurance companies’ lunch,” Olga told me.

This threat forced AAA and other insurers to think about innovation and how to embrace the startup mentality. AAA had to think about how to respond quickly and rapidly yet methodically. Olga looked at external forces that were impacting the organization. She identified customer centricity, tech disruption from sharing economy and autonomous vehicles, and COVID-19, which forced everyone to be more agile and lean. That led her to use a prominent innovation theory—design thinking.

“We can build on the legacy of design thinking, of lean startup, of agile methodologies to kind of help innovate in a more methodical way,” Olga explains. She believes that organizations should use these kinds of methodologies to de-risk new product and service launches as well as other innovation initiatives. “We’re not just like you’re saying, sitting in a room coming up with ideas.”

What Exactly Is Design Thinking?

Design thinking is a process for solving complex problems, finding smart solutions, and innovating products. The origin of the term design thinking dates back to the 1960s and Nobel Prize laureate Herbert A. Simon is believed to be the first person to mention it in his 1969 book, The Sciences of the Artificial. But it was not until 1980s that design thinking started being widely used as a problem-solving approach.

It’s a process that works in an iterative or cyclical manner. First, it looks at the problem from different perspectives – customer, business and technology. Then a team of experts working together looks for solutions to the identified problem. After this, prototypes are created from cheap materials such as cardboard, wood and foam. This is followed by testing the prototype with users to get feedback and improve it before launching a product or service.

Olga believes that design thinking is essential for organizations to succeed in a hybrid work environment. To achieve this, Olga suggests breaking down the organization into three “bubbles”: customer experience, product development and ideation. Focusing on these areas can help build muscle around innovation practices and rituals within the organization.

“For individuals, a lot of the inspiration that I drew was from various things teams and individuals did at these organizations,” Olga explains. She recommends building a tool kit of practices and rituals, be it as an individual or team leader, to get into a growth mindset is the only way to keep up with the fast-paced pace of innovation.

“We’re being constantly challenged no matter what with new trends. Like now, we are in a recession. That creates another opportunity for us to think about how we work and what we work on,” she said.

Tell us what you think on LinkedIn, Instagram, Facebook, or Twitter! @opusconnect.

By Lou Sokolovskiy, Opus Connect
March 2023

Cracking the Code: Strategies for Talent Acquisition and Management in Middle Market Companies and Private Equity Firms


Talent acquisition and management continue to be challenging for middle market companies, and this was the focus of our recent webinar titled, “Unlocking the Secrets of Talent Acquisition and Management” held on January 31st, 2023. The webinar brought together experts in middle market PE and human capital to discuss strategies for talent acquisition and management.

Moderated by Tim Lewis, Partner at Southfield Capital, the panel discussion featured Sandy Fiaschetti, PhD, Founder & Managing Partner at Lodestone People Consulting, and Geri House, Chief People Officer at Platform Partners. The discussion delved into the state of play in talent acquisition, the use of scientific analytics for talent and organizational assessment, strategies for onboarding and career development, and how investment bankers and PE firms view talent acquisition and management in their processes.

One of the key points made during the webinar was the importance of companies taking a proactive approach to talent acquisition and management. As Tim Lewis noted, “Companies that are successful in talent acquisition and management are the ones that are constantly investing in their people and thinking about how they can build a culture that fosters growth and development.”

Geri House emphasized the importance of a holistic approach to talent acquisition and management, “Companies that take a holistic approach, looking at the entire employee lifecycle and how they can support employees in their personal and professional growth are successful.” By investing in career development programs and creating a culture of continuous learning, companies can retain top talent and foster loyalty among employees.

Sandy Fiaschetti highlighted the role of data in talent acquisition and management, “By collecting and analyzing data on employee engagement, turnover rates, and other key metrics, companies can identify areas for improvement and develop targeted strategies to address these issues.” She also noted the challenges faced by middle market companies in attracting and retaining top talent, particularly in the post-COVID-19 world. With employees looking for greater work-life balance, companies that can offer flexibility and remote work options are likely to be more successful in attracting and retaining top talent.

In conclusion, the webinar provided valuable insights into the world of talent acquisition and management, offering strategies and advice to help middle market companies overcome the challenges they face. As Tim Lewis stated, “talent acquisition and management is an ongoing process, and companies that can adapt and evolve with the changing needs of their employees are the ones that will be successful in the long run.”

Watch the full version here on our YouTube channel: Opus Connect Webinar: Unlocking the Secrets of Talent Acquisition and Management

Tell us what you think on LinkedIn, Instagram, Facebook, or Twitter! @opusconnect.

By Opus Connect
Feb 2023

Insider Perspectives on Healthcare M&A: What You Need to Know


Healthcare mergers and acquisitions (M&A) have been on the rise in recent years, with the sector seeing an increasing number of deals. To gain insights into this trend, we interviewed a number of transactional professionals in the healthcare space: Here are some of the key takeaways from our interviews.

  1. Strong Industry Fundamentals Driving M&A Activity
    All interviewees pointed to strong industry fundamentals as a key driver of M&A activity in the healthcare space. According to Robert Ullman, Managing Director at Dinan Capital Advisors, “The healthcare sector is one of the most attractive sectors for private equity and strategic buyers due to demographic trends driving underlying demand for healthcare services.” Similarly, Ernesto Carrizosa, Executive Managing Director & Partner at WM Partners, LP noted, “Healthcare has become a core sector for private equity and other investors as there is a constant need for new and innovative products and services in this space.” Private equity’s involvement can help drive the production of these products, as Grady Miller, Principal at Vance Street Capital explained, “We’re oftentimes adding capacity and capabilities that allow product development to happen and happen in a quicker cycle.”
  2. Focus on Niche Markets and Tech-Enabled Healthcare Solutions
    One interviewee highlighted the importance of focusing on niche markets in healthcare M&A transactions. He stated that “we are seeing a lot of M&A activity around providers and companies that are very focused on specific areas of healthcare such as behavioral health, addiction treatment, and women’s health.” Similarly, David Orlandella, Managing Director at ORIX Corporation USA emphasized the significance of tech-enabled healthcare solutions, stating that “the growth in digital health and telemedicine has opened up new opportunities for investors and strategic buyers to acquire companies with innovative solutions and technologies.”
  3. Consolidation and Integration of Healthcare Providers
    The interviewees also discussed the trend of consolidation and integration of healthcare providers, particularly in the physician practice management (PPM) space. Robert Ullman noted that “We expect PPM will continue as an active area for M&A, with many private equity firms investing in this space to create larger and more efficient practices, while removing administrative burden from the physicians themselves” Meanwhile, Ernesto Carrizosa stated that “the consolidation and integration of healthcare providers is driving economies of scale and operational efficiencies, and this is a key trend that we see continuing in the future.”
  4. Regulatory and Reimbursement Challenges
    Finally, the interviewees acknowledged that regulatory and reimbursement challenges are an ongoing concern in the healthcare sector. One interviewee noted that “the regulatory landscape can impact healthcare M&A activity as changes in healthcare policy can have a significant impact on reimbursement rates and provider operations.” David Orlandella added that “the constantly evolving regulatory environment in healthcare can create uncertainty, and buyers need to be prepared to navigate the complex landscape.”

In conclusion, the healthcare M&A space is experiencing strong growth driven by industry fundamentals, tech-enabled healthcare solutions, consolidation and integration of healthcare providers, and regulatory and reimbursement challenges. As the healthcare industry continues to evolve, transactional professionals need to stay abreast of these trends and navigate the complex regulatory environment to find opportunities for growth and investment.

Tell us what you think on LinkedIn, Instagram, Facebook, or Twitter! @opusconnect.

By Opus Connect
Mar. 2023

Strategies for Successful Medtech Investments in an Evolving Healthcare Market


As interest rates rise and a recession looms, private equity firms in the life sciences sector remain optimistic about the potential for medtech investments. In 2021, private equity deals in this space reached a record high of $26 billion, reflecting a growing interest in the transformation of the healthcare industry.

Medtech investments are not without their challenges, however. Due diligence in this space can be complex as it involves assessing the security of intellectual property, which can be difficult to determine. Lamar Stanley, Director at Lead Capital Partners, commented that “Oftentimes, it requires hours and hours of study into contracts, patents, trademarks, consulting agreements, etc., and because medtech continues to explode as a sector, the IP landscape for specific opportunities is constantly changing.”

PE firms will often work with interdisciplinary teams to get a comprehensive view of a medtech company’s products and their potential for commercial success. Asif Zaman of PPC Enterprises stated that “it is extremely important to understand where a company’s products are in their life cycle. Getting feedback from the physicians, sales reps, and key opinion leaders that work with those products in the field is essential to understanding the product’s efficacy, popularity and future commercial success.”

Despite the complexities, medtech companies continue to be highly attractive targets for private equity firms. According to Zaman, “Platforms with differentiated technical capabilities or serving niche end-markets always stand out.” In addition, firms are attracted to the perceived social impact of a prospective company. “Primarily, we are most focused on finding opportunities that help payers, providers and/or the patients. If there is a medtech opportunity that is meaningfully improving patient outcomes, we’re going to be interested” said Stanley.

As the future of medtech investing remains uncertain, private equity firms can maximize their chances of success by selecting a team of trusted advisors and taking a strategic approach to investments in this sector. The combination of technical expertise and a focus on patient outcomes creates a unique opportunity for PE firms to play a critical role in shaping the future of healthcare.

Tell us what you think on LinkedIn, Instagram, Facebook, or Twitter! @opusconnect.

By Bill Bowler, Opus Connect
Feb 2023

The Journey to Industry 4.0: Navigating the Convergence of Operations and IT


In the rapidly evolving world of industry and technology, companies are facing a new challenge in integrating their operations with the latest technological advancements. The challenge is especially significant for those in the manufacturing sector where production processes are often long-standing and traditional, and the integration of technology requires significant changes in the company’s operations. In a recent panel discussion, titled “The Convergence of Operations and the IT Function – How Technology-Based Solutions Can Drive EBITDA Growth” moderated by Ted Morgan, Partner at Plante Moran, three leading experts shared their insights on how to navigate this convergence.

The panelists included Rudy Minar, Partner at Mirus Capital Advisors, Lauren Dunford, CEO at Guidewheel, and Thomas N. Tullo, Founder and Managing Director at Range Light Capital. They discussed the impact of Industry 4.0, the fourth industrial revolution, on operations and the IT function. Industry 4.0 is characterized by the integration of digital technologies into all areas of production, from design and engineering to manufacturing and logistics.

According to Rudy Minar, “Manufacturing has come a long way from the 1700s. Back then, it was all about manual labor and manual processes. Fast forward to today, and it’s all about data, automation, and technology.”

“Manufacturers that are PE owned, like private equity firms, are going to look at the narrative coming out of our 50-minute discussion and say, ‘‘Well, I’m not going to do that.” No one’s going to say that – they’re going to say, “Heck yeah, I’m in that – let’s do that!'” said Ted Morgan, summing up the discussion. The experts emphasized that despite the opportunities that Industry 4.0 presents, there are also significant challenges that must be overcome. The integration of technology into operations can lead to significant changes in processes, systems, and cultures, and companies must be prepared to adapt.

Thomas Tullo stressed the importance of empowering people at the forefront of the organization to drive innovation. “It’s very hard to drive centrally, it has to be driven from the outer parts of the organization,” Tullo said. “In my experience, whether it’s a large firm or a small firm, you want some empowerment going on there for people to sort of say, ‘Okay, I’ve got to fix this problem. Nobody from the central office is going to give me a solution. What can I do and what tools do I need to kind of help improve my line and the manufacturing plant?'”

Lauren Dunford echoed this sentiment, highlighting the importance of data-driven decision making in driving operational efficiency. “Data is the key, right? It’s all about data. You know, if you don’t have the data, you don’t have the insights, you don’t have the ability to drive the efficiencies that you’re trying to drive,” Dunford said.

In conclusion, the experts emphasized the importance of adapting to Industry 4.0 and integrating technology into operations. Companies must embrace change and be prepared to adapt their processes, systems, and cultures to realize the benefits of the fourth industrial revolution. By empowering people at the forefront of the organization and making data-driven decisions, companies can ensure they stay ahead of the curve and drive operational efficiency.

“Create the right tone, create the leadership, get out of the office, go walk the floor, and in the floor, meet people who are on the floor, feel like they are kind of getting recognized for their ideas and their innovation,” Tullo said. “Encourage them to use the technology that’s available to them and then kind of let them take the lead, I would say outside in right now is kind of the way it needs to go.”

Watch the full version here on our YouTube channel: Opus Connect Webinar: How Technology-Based Solutions Can Drive EBITDA Growth

Tell us what you think on LinkedIn, Instagram, Facebook, or Twitter! @opusconnect.

By Opus Connect
Feb 2023

Embedded Finance: Driving the Future

In our modern world businesses are becoming more consumer oriented and user friendly – consumers have a variety of options to get the best experience and product/services with minimum effort online and offline. If you get your Uber in the morning and use your Apple Pay to buy a cappuccino on your way to the office you’re already taking advantage of ‘Embedded Finance’. If you’re looking to buy a nice bag for your mom, Affirm or Klarna can finance your purchase via their buy-now-pay-later model. So, what is Embedded Finance and why this has become yet another buzz word?

Embedded Finance comes from the general concept of Banking as a Service, or BaaS. BaaS allows non-financial companies to offer access to standard banking products and features at point of sale. This is enabled through webhooks and open APIs (Application Programming Interfaces) – Embedded Finance is more defined by the front-end access to financial services, whereas BaaS is more defined by its back-end banking functionality. This integration via open banking systems and API architecture allows e-commerce platforms, websites, apps and other non-bank businesses to deliver financial services, often white-labeled, to their customers. Now, without the burden of regulatory and compliance oversight of being a traditional bank, embedded finance enables you to offer to your customer additional features to accelerate your sales and engagement, simplify user transaction experience and generate new revenue streams.

According to recent studies, the Embedded Finance market globally is expected to reach $7 trillion in the next 10 years. This is a huge opportunity for banks, fintech companies and other non-bank lenders. VC investors have been fast to recognize the potential value in the niche – the chart below depicts global VC investments in Embedded Finance companies from 2016 through September 2021, and we’re just in the beginning of the cycle.

Source: Statista 2022


This is a global phenomenon – young population and technology advancements drive embedded finance in China, India, Indonesia, several Latin American countries and, of course, the US, Europe and the UK, the latter being one of the earliest adopters of BaaS models. This trend created a lot of opportunities for virtual banks, also known as neobanks, fintech companies, BaaS and, of course, embedded finance. These models are taking a growing share of overall transaction volume compared to traditional banks. Quoting J.P. Morgan CEO Jamie Dimon, “The role of banks in the global financial system is diminishing”, and millions of newly added accounts by neobanks prove it. Embedded finance future lies in several major applications:

Embedded Payments

Payment processing involves an automatic pay feature with your saved credit card or digital wallet. PayPal and Stripe have been at the forefront of embedded payments for several years now, while other players are coming to the market to address other areas such as international transaction complexities, user onboarding processes, KYC compliance, virtual credit cards and others. These solutions make the process more secure and streamlined, help protect from fraud, card management and fulfillment, reduce transactional fees and provides liquidity faster for various jurisdictions.

Embedded Insurance

Renting a car, booking a trip, obtaining Airbnb host protection and other goods and/or services purchases come bundled with an insurance protection coverage in the same offering. An embedded insurance solution is usually integrated into an existing system through an API, which helps insurers analyze policy and price data and suggest the right policy at the point of sale.

Embedded Lending

Embedded lending is split into two significant components: Retail lending and Business lending. Affirm and Klarna are great examples of B2C lending, where capital provider would face consumer credit risk based on FICO score or other proprietary alternative scoring system. Business lenders are B2B capital providers and include such companies like Kabbage, Fundbox and others targeting SME’s (small to mid-sized enterprises). Sometimes these providers are standalone offerings integrated into customer’s ERP systems, and sometimes they target specialized software products to give a supplier or vendor an option to get paid early on the product sold or job completed. The structures could vary from lending to revenue-based model, advances against receivables, purchase orders and inventory. These working capital solutions help consumers purchase discretionary products and help small business sustain their working capital requirements and overhead as well as create stronger trade networks with customers and suppliers.

Embedded Investing

Another extension of Embedded Finance is Embedded Investing, or providing robo-advisory, brokerage and wealth management services to consumers. Acorns, for example, delivers micro investing, full automation and adjustments according to your goals and wishes via automatically investing your spare change. PayPal now offers crypto purchases through their platform, which also changes the way brokerage services are offered and consumed.

Our everyday life includes a wide variety of transactions, and they are increasingly being digitized. Embedded Finance will continue to grow as tools to offer a digital product and deliver a more convenient and flexible customer experience. It can help streamline the payment process, allow customers to earn points and rebates, improve savings, protect data security, and make businesses more efficient and resilient. Embedded Finance will bring additional structural changes to the finance world and revolutionize capital flows over time – this creates great opportunities for VC and Private Equity on the technology side and debt providers on the B2C and B2B side. The first players who embrace the changes are the most likely to win.

Tell us what you think on LinkedIn, Instagram, Facebook, or Twitter! @opusconnect.

By Alisa Rusanoff, Portfolio Manager, Senior Vice President at Crescendo Asset Management
September 2022

Private Equity Firms Brace for Slow Quarter Ahead as Consumer Spending Shifts to Frugality

We talked to a dozen experts to find out what less consumer spending in the wake of the Covid-19 pandemic means for private equity.

In recent months, as the Covid-19 pandemic has slowly receded in the United States, experts in the private equity world have been closely watching consumer spending habits. What they’ve seen is a shift towards frugality that is likely to have a profound impact on the industry in the months and years to come.

“Instead of eating that steak, they’re going to the QSR,” said Brent White, Vice President at Gauge Capital, a Dallas-based private equity firm focused on investing in growth-oriented middle market companies. “What they’re trying to do is downsize what they buy and be more frugal on how they spend their money.”

White says the ripple effects of this new frugality are already being felt in the private equity world, where the deal flow has slowed, and valuations have come back down to earth. “We’re not going to see the elevated multiples. We’re going to see normalized multiples and valuation expectations for these businesses,” he said.

White is not the only one seeing this shift. Across the private equity landscape, experts are predicting a “less liquid” quarter ahead, as businesses that were once seen as sure bets become less attractive to investors.

“I do believe that there will be a slowdown,” said Bobby Sheth, Managing Director at Salt Creek Capital, a private equity firm based in Woodside, California, adding that he does not expect to see a recession like the one that followed the financial crisis of 2008.

“As we think about mass-market chains and products that are much more commoditized in nature, we think that there’s going to be a bit of a slowdown over the next three to six months for sure,” he added.

But Sheth added that specialized higher-end businesses such as certain wine racking service providers and wood flooring companies that he has invested in over the past year are likely to weather the storm better than their mass-market counterparts. As these businesses offer more experiential products and services that consumers are willing to pay a premium for and can be seen as a real asset that counters inflation.

The Russia-Ukraine conflict and its broader geopolitical implications on oil prices are among the other factors that could have an impact on consumer spending and, as a result, private equity in the months ahead.

“That’s probably what keeps me up the most,” said Sheth, “if that escalates, if that keeps on getting worse, what does that mean? I think broadly, and I saw this, again, kind of in 2008 and 2009, you know, if oil stays at elevated levels for a significant period, that causes all sorts of ripple effects across the economy.”

The new shift toward frugality is at odds with the first quarter of 2020, when consumer spending was 24% higher than pre-pandemic levels, according to a Bank of America study. But as inflation and gas prices rose and the government stimulus checks dried up,

consumers appear to have tightened their belts.

“People took a pause and started being cautious about where they spend their money,” said White. “And you’re seeing that flow through the balance sheet on a lot of these companies that we review that are coming to market.”

David Thibodeau, Managing Director, Wellvest Capital, a Boston-based firm investing and advising companies that are in the consumer health and wellness space, argues that further price increases could lead to an even more pronounced shift in consumer behavior.

“Many of our portfolio companies/clients have been taking price increases over the last year and multiple price increases,” he said.

“Not just one or two, but multiple. That’s going to reach a limit. The consumer is going to, at some point, start to say ‘no, we’re just not willing to [accept that]. I think we’re already we already seen that in some of the IRI numbers where people are moving towards replacement brand replacement products to brands,” he added.

Ketan Mehta, Managing Partner at The Corporate Development Group, a California-based investment bank that specializes in consumer products, remains optimistic, however, arguing that in the long term, the pandemic will lead to a pent-up demand for consumer goods and services.

“But I think we’re gonna have a soft landing,” Mehta said, predicting the supply chain issues that have plagued businesses in the past couple of years will eventually ease next year “We may dip into recession, a very short amount of time, maybe towards the end of this year or first quarter of next year. But I think 2023 is going to be an OK year.”

Similarly, Nick Barker, Partner at Longhouse Partners, a Detroit-based consumer-focused private equity firm, is bullish when it comes to the merger and acquisition market (M&A) for consumer businesses.

“Because of consumer demand, a lot of businesses are now, of course, trying to sell off of those arguably inflated earnings, and people are buying off of those inflated earnings,” he said.

“But I think we’ve seen several data points where that level of aggressiveness in the M&A market is persisting. I think everyone’s obviously kind of thinking about recession and what that may mean. So, there may be a little bit lower leverage applied to some of these deals and more and more equity, but we haven’t yet seen that have a massive impact on overall valuations,” he added.


Tell us what you think on LinkedIn, Instagram, Facebook, or Twitter! @opusconnect.

By Lou Sokolovskiy, Founder & CEO at Opus Connect
August 2022

Supply Chain Crisis

Supply Chain Crisis

Are we experiencing the biggest shift in supply chains since the era of globalization began?
From the US-China trade wars to the Covid-19 pandemic, there has been an existing strain on the supply chain. Now as Russia’s war on Ukraine escalates, the strain on global supply chains has intensified. Understanding how global manufacturers responded to the disturbance of their supply chain is a crucial part in helping businesses structure their responses. 

Russia’s war against Ukraine has heavily impacted supply chains around the world. According to Jennifer Bisceglie, Founder, and CEO of Interos, a supply chain risk management company nearly “300,000 companies in the U.S. and Europe have suppliers in Russia and Ukraine, putting their national economies at risk. That’s how interconnected our world is today” (Segal). In fact, some say that the manufacturing sector will be impacted the most by this supply chain disruption. Simon Gealt, the Executive Vice President and Chief Officer at supply chain consulting firm Proxima says, “It’s things like the neons and metals that are going to have an enormous effect on the production of semiconductors and automobiles” (Segal). Companies will now focus on monitoring their supply chains in order to get ahead of the next crisis. This changing landscape will lead to new strategies for alternative sourcing. Therefore, some do argue that we are now experiencing the biggest shift in supply chains since the era of globalization began. 

How will manufacturing companies respond?

Many manufacturing companies are now moving quickly to create visibility and clearance in their supply chains. Given the rapid changes in customer demand, businesses must now analyze and prepare their supply sources in advance of potential disruptions. “It’s not just a concern for big companies, but it is a concern for everyone. Now even small mid-size companies all have exposure either directly or through their suppliers,” says Lou Sokolovskiy, CEO and Founder of Opus Connect. Understanding the full supply chain and customer base, not one degree away but at least five degrees away is very important. For example, various portfolio companies may look into sourcing their parts from vendors in regions with slower demand. This will allow for a greater supply in active factories. In a 2020 survey by Mckinsey  “just over three-quarters of respondents said that they planned to improve resilience through physical changes to their supply-chain footprints. By this year, an overwhelming majority (92 percent) said that they had done so” (Trautwein). 

It is going to be critical for companies to work on alternative sourcing strategies, especially as tensions increase between Russia and Ukraine. Overall, manufacturers must think of new innovative ways to optimize production, distribution, and logistics in order to avoid supply chain issues. 

Tell us what you think on LinkedIn, Instagram, Facebook, or Twitter! @opusconnect.


  1. Alicke, Knut, et al. “How Covid-19 Is Reshaping Supply Chains.” McKinsey & Company, McKinsey & Company, 23 Feb. 2022, 
  2. Miguel, Alejandro Beltran de, et al. “Private Equity and the New Reality of Coronavirus.” McKinsey & Company, McKinsey & Company, 16 Sept. 2020, 
  3. Segal, Edward. “Supply Chain Crisis Worsens as Russia’s War against Ukraine Continues.” Forbes, Forbes Magazine, 2 Apr. 2022, 

By Lou Sokolovskiy, Founder & CEO at Opus Connect
April 2022

How the Pandemic Transformed HR Function for Private Equity Firms


In 2020, when the Covid-19 virus turned into a pandemic, the business world had to adapt quickly. Companies of all sizes were forced to let their employees work from home as a temporary solution. As the pandemic dragged on, it became clear that remote work was not just a provisional fix but a new way of working.

For private equity firms and their portfolio companies, which had long relied on in-office workforces and face-to-face interactions to conduct due diligence and evaluate company performance, the switch to remote work meant a transformation in how they did HR, according to several private equity HR executives interviewed for this article.

In many ways, the pandemic elevated HR from a back-office function into a strategic role in private equity firms.

“We are thinking about HR or Human Capital in a new way at Southfield” Tim Lewis, Partner at Southfield Capital told me.  “10 years ago it was a back office function required for compliance and benefits.  Now a thoughtful and engaged HR function is a strategic necessity and the range of activities our HR execs are asked to address has expanded from functioning during a pandemic to addressing new ways to think about the workplace.”

“It’s a whole new game today,” Keith Swenson, longtime HR executive and operating partner at New York-based consulting firm Beckway, told me in a Zoom call.

“For most organizations, they have to press the reset button because the conditions in the market have changed. The expectations of workers have changed. Based upon being remote versus in office, the expectations of new people coming into the organization have changed as a result of that,” he added.

Time for a New HR Playbook?

With the business world moving to a distributed workforce, HR needs new tools and processes. It appears that the old ones just won’t cut it anymore. Swenson, for example, whose company leverages leading B2B commercial products, said HR executives like him had to rethink the way they attract, evaluate, and retain talent.

“Companies are finding themselves having to rethink their whole strategy around people on how they supervise, how they motivate, how they pay,” he said, adding that he has observed some organizations lose key personnel as a result of the pandemic.

Retaining talent has been a significant challenge for companies across industries. According to the U.S. Bureau of Labor Statistics, 4.5 million workers, or 3% of the country’s workforce, quit their jobs in November, intensifying the mass resignations that began in early 2021.

Experts say one of the reasons for the mass exodus is the ability of employees to work remotely. Except for certain jobs that cannot be done from home, such as those in the medical and construction industries, most positions appear to be doable with a computer and internet connection. At least, that is what workers think, and employers have been forced to accept.

“There is a war on talent,” said Lisa Rivoli, the executive vice president of Human Resources for New York-based Milrose Consultants a Southfield Capital portfolio company.  “We have to look to retain the talent we have. We are exploring ways of improving our benefit offering and maybe offering a continuous, flexible workweek,” she added.

For HR professionals like Rivoli, the pandemic has meant a shift in the way they do their jobs. No longer can they rely on face-to-face meetings with employees to get a sense of their work performance. They now have to find other ways, such as video conferencing and employee surveys, to gauge how people are performing.

“It’s gotten a lot harder because you can’t just get up and go down the hallway anymore,” she said. “You have to make all these phone calls. And sometimes, you know, people are on the phone, you can’t reach them… I literally have two phones. Two phones are going off. My computers are going off. My house phone might ring. So it’s a lot.”

Attracting New Talent: A Challenge to be Courted

In addition to retaining your best and brightest, attracting talent has also become a challenge for HR professionals. To lure the best talent, Forbes reports, many firms are now offering sign-on bonuses and other perks, such as paid vacation days and tuition reimbursement.

The appeal of remote work is one that PE portfolio companies might have to grapple with for the foreseeable future, including those companies that cannot embrace it because of the nature of their business. American Refrigeration Company (ARC) a Southfield Capital portfolio company based in New England is one such company.

“Finding people during COVID has been the biggest challenge,” said Mary Fairbairn, the company’s Director of Human Resources.

For example, she said as an essential business it remains a struggle to find project managers to oversee product installations for manufacturing plants or ice-skating rinks as those jobs require people to be on site. There is no way an installation can be done remotely – we need people onsite. This problem could become more acute as the pandemic drags on and new Covid-19 variants continue to emerge.

To Fairbairn, remote work has also meant “a mindset shift” for her department as it tries to retain and recruit talent.

“I think it’s shifted our mindset, from something that has to be well defined, to something that’s a little bit ambiguous,” she said, explaining how employees’ personal lives are now a greater factor when it comes to things like scheduling.

“Also, a lot of people have children. We try to be a little bit more flexible when it comes to someone that has child care, or if their child is sick, of course, we’re always very nice about it.”

“A Candidate’s Market”

And nowadays, when people apply for a job, their goal might not be to get hired by the company, but rather to use the offer as a bargaining chip for a better position or more money at their current company, said Rivoli.

“They may want to use your offer to bring it back to their current employer to see if they can gain a better compensation package where they are. So, we’ve had that with people ghost us and then at the ninth hour, tried to negotiate real hard on compensation after they already knew what the compensation package was,” she said.

In light of this reality, has made six wide-ranging recruiting projections for 2022, including the notion that “remote work is the new normal.”

“It’s a candidate’s market,” said CEO Evan Sohn. “The talented candidates are in high demand. And if they’re demanding hybrid or remote workforces, the companies have to adjust to those workforces.”

Adam Miller, the founder, and managing partner of Hygge Capital Partners, a human capital solution for the private equity industry and their portfolio companies, says the need for human capital within the PE space has never been greater.

“Now, all firms are rushing to the plate to hire HR professionals to help them,” he said. “They think proactively through each one of these components to make sure that they’re creating a competitive advantage in the market when they’re out telling their story marketing their brand.”

Miller’s views about HR’s function being about “creating value” align with those leading HR scholars such as Dave Ulrich. Often referred to as the “father of modern HR” for his pioneering work on human capital, Ulrich recently said that the time had come to “reinvent” HR.

“HR is not about HR,” he told Geeks, Geezers & Googlization podcast on December 30. “HR is about helping your organization compete and succeed in the marketplace.”

By Lou Sokolovskiy, Founder & CEO at Opus Connect
January 2022