Governance fit — that is, how a sponsor collaborates with and supports their portfolio company’s management team — is central to value creation in private equity. Achieving governance fit prevents costly misalignment.
Why Sponsor-Executive Governance Fit Matters
The persistence of extended hold periods has led to increased prioritization of top-line growth, making it essential for sponsors and executives to achieve optimal governance fit, particularly as deal values and volume fluctuate.
- Hold periods remain extended. According to Pitchbook data, 40% of all currently held PE assets have been held longer than four years. Firms are focused on operational value-add to maintain strong performance amid longer time frames.
- Sponsors are increasingly prioritizing strategic value creation, including commercial growth, as aging portfolios and pressure to exit force a shift from pure cost control or liquidity tactics, according to EY’s Q2 2025 survey.
- Private equity fundraising has slowed sharply in 2025, falling 34% over the past four quarters to its lowest level since the pandemic, according to PitchBook.
- The demand for excellence in commercial leadership roles such as CROs, CMOs, and GTM-focused Operating Partners has risen in response to an increased emphasis on organic growth, as evidenced by the priorities of the private equity firms with whom we work.
Amid a slower deal and fundraising environment, sponsors are focusing on operational execution and portfolio performance to sustain value through extended hold periods. These conditions demand executive talent capable of managing the full M&A lifecycle and driving organic growth even as capital and exit opportunities remain constrained. Recruiting and retaining top-tier talent remains critica...