“Investment Interim Management: the management model of choice for investment companies”

Investment companies, venture capital firms and funds use interim management to ensure that the investment made is managed properly and achieves the expected returns.

11 July 2022

Alongside M&A (mergers and acquisitions) processes and the restructuring of companies and business units, investment management has become one of the main reasons for engaging interim management services. This is what we at EPUNTO Interim Management® have been observing through our growing collaboration with investment firms, institutions and venture capital funds. The relationship with these organisations involves a threefold commitment: to the client commissioning the service, to the investors they represent, and to the company they have joined, with one primary aim: an optimal return on investment.

In such cases, a great deal of resilient leadership is required – that is, the ability to adapt and understand the situation in order to take firm control from the moment the interim manager begins their assignment. Active listening is essential for gauging the organisation’s pulse, from the most basic level right up to the Board of Directors. Leading transformation and organisational change is one of the favourite challenges for the senior executives who make up an interim management firm.

What do interim management firms contribute when taking control of a subsidiary?

Pre-transaction advisory services:

In addition to executive management services aimed at the effective management of investments, we are also engaged to provide Advisory Interim Management© services to offer guidance in the phase leading up to mergers and acquisitions of a company. In this case, the interim manager we provide is responsible for carrying out due diligence and establishing the priority strategic objectives for the transaction in progress. It is relatively common for this adviser, given their knowledge of the transaction, to be subsequently engaged to manage the investee company on behalf of the investors through Interim Management©, our specialist flexible management service for this type of project.

Reliability and accountability:

Generally speaking, the appointment of one or more interim managers by an investment company or a venture capital fund – whether at management level or as members of the Board of Directors – is not driven by a lack of confidence in the management capabilities of that organisation’s professionals. It is an act of responsibility towards the investors and the shareholders of that company. Bringing in talent and managerial expertise, exercising control to safeguard the investment and enhance its value, is what is expected of those who commit to an organisation that is usually in a critical situation and needs to be turned round. To achieve this, the very best are required, and this is precisely what interim management firms offer – particularly those of us who are part of international networks and groups, such as EPUNTO Interim Management® with Globalise – The Global Interim Management Group, which enables us to provide services in any country worldwide.

Guarantees of investment success:

An interim management service provides security and reliability to the stakeholders within the organisation benefiting from the capital injection. The experience of the interim manager stationed within the investee company builds trust – one of the keys to an organisation’s success, particularly if it is in a critical situation. Cost control and optimisation of resources, financial discipline, greater capacity for growth through the establishment of new strategic alliances and the strengthening of existing ones, and the reorientation and motivation of professional teams – all of this represents a valuable contribution, complementing the capital injection. To summarise in four stages: Interim Management provides control, fosters the company’s growth, generates value and knows how to exit the company in which it has intervened, leaving projects underway and managed by retrained internal staff or external professionals selected by the interim manager themselves.

Flexibility:

Without a doubt, flexibility is one of the qualities that makes interim management an extremely attractive service for the venture capital sector. When there is a need to engage the best professionals without committing to a long-term arrangement, hiring a firm specialising in interim management is the solution. Before engaging the service, the organisation’s needs are analysed, an implementation plan is drawn up with a predetermined cost, and the start and end dates for the interim manager’s assignment are agreed. This is the unique feature that is making ‘flexible management’ one of the major competitive advantages in a volatile business environment, where uncertainty and short-termism have become part of everyday professional and business life.

Immediate operational capability:

The experience and executive capabilities of our professionals – true specialists in their respective fields – enable them to be brought on board immediately and to start solving problems from day one. These are individuals who have spent years, and in some cases decades, working in the sector and type of organisation they are joining to carry out their duties as interim managers.

However, engaging a firm specialising in flexible management offers an added advantage: the possibility of bringing in a complete team comprising the very best professionals. At EPUNTO I.M., we have developed a model we call Interim Management Teams©, a comprehensive solution for carrying out specific projects in areas of activity where there is a shortage of professionals. Sometimes, bringing in a single interim manager is not enough; a multidisciplinary team is required, whose services the company can then dispense with once the project has been completed. In the world of M&A, it is often the case that investment companies, institutions and venture capital funds have backed a company on the condition that it taps into new market niches, leading to the creation of new product or service lines, the development of innovative business models and the opening up of new markets. Interim Management Teams© is the perfect solution for such cases.