Human Capital: The Hidden Lever in Private Equity Value Creation
In private equity, the spotlight has long been on financial discipline and operational efficiency. But as Frankie Close, Founder of Inflection Edge, highlights, investors often underestimate a critical determinant of success: human capital.
"Great strategies stall not because the numbers were wrong, but because leadership, culture and workforce design weren't aligned to the thesis." Having seen this pattern play out across her time at global advisory firms, EY and Macquarie Group, and now in her own practice, Frankie founded Inflection Edge to close that gap at the exact moments when value is most at risk: M&A, growth sprints, leadership transitions and large-scale transformation.”
In a conversation led by Leanne Wells, Principal at Allura Partners, Frankie explored the crucial, yet often underestimated, role of human capital in creating private equity value.
The Risks Hiding in Plain Sight
The most common risks Frankie encounters aren't hidden in balance sheets; they’re embedded in people and the organisational structure. Leadership capability and capacity fit, particularly among first-time portfolio CEOs, can slow decision-making and execution. Decision rights are often unclear, creating bottlenecks, while investors and management may be misaligned on pace and priorities. The organisation isn’t designed to scale, and outdated performance frameworks reward the wrong behaviours. Succession plans for critical roles outside the top team, like Human Resources, IT, Product, and Sales, are often overlooked.
"These issues aren't abstract," she notes. "They show up in delays, corrective leadership changes, unplanned integration costs, and ultimately in weaker exit stories." For founder-led businesses, these challenges are amplified. Founders often remain powerful culture carriers even after stepping back, creating uncertainty for executives trying to lead the next chapter. Frankie emphasises the importance of deliberate alignment sessions to foster trust and establish a clear vision of "what good looks like" for the future.
From Intuition to Evidence
Private equity investors take pride in making data-driven decisions. Yet people and culture are too often left to instinct. Frankie works with private equity firms and their portfolio companies to implement risk scoring using an ISO-accredited framework, translating qualitative judgments about people and culture into quantifiable metrics.
"Converting people and culture into data gives investors a dashboard for pricing execution risk, setting deal conditions and monitoring performance through the hold period," she explains. Typical measures could include leadership trust and effectiveness, engagement (eNPS), first-year attrition, time-to-fill critical roles, succession coverage, and productivity per FTE.
The benefits extend beyond diligence across the M&A lifecycle. "At exit, instead of vague assurances like 'we have great people,' investors can point to hard data that demonstrates resilience and capability over several years. That's a powerful addition to the exit story," Frankie notes.
The First 100 Days
The early months after a deal are when Frankie’s work is most impactful. She partners with portfolio CEOs and executive teams to design and facilitate alignment sessions, establish disciplined operating rhythms, define clear priorities tied to the investment thesis and, most importantly, set up dashboards to measure human capital risks.
Her approach goes beyond meetings: Frankie provides executive coaching, helps manage leadership transitions, and guides succession planning for critical roles. She also leads value creation sprints to accelerate performance and embed accountability from day one.
Equally important is proactive listening. Frankie helps teams implement pulse checks, skip-level conversations, and other feedback mechanisms to catch early warning signals before they escalate into attrition or missed milestones.
"Proactive alignment and structured execution aren't optional; they’re essential," Frankie notes. "Even a single misstep or key departure can ripple through the organisation. My goal is to give leadership teams the clarity, focus, and support to navigate the first 100 days successfully."
Leading Under Investor Pressure
Frankie also brings a distinctive lens to leadership coaching, one informed by neurodiversity and awareness of ADHD. Many founders and high-performing executives, she observes, thrive because of cognitive profiles that enable rapid pattern recognition, creativity and high-energy focus. Yet under the weight of managing multiple stakeholders with different agendas, increased reporting and governance, these same strengths can sometimes become friction points.
"An ADHD-aware approach helps leaders design workflows that reduce cognitive load, harness their strengths, and accelerate execution, without burning themselves or their teams out." By supporting leaders through these inflection points, investors can preserve entrepreneurial drive while ensuring disciplined delivery.
A Call to Investors
For Frankie, the message is clear: leadership and culture aren't soft issues; they are priced risks. "Run a human-capital stress test, wire the top three gaps into the value-creation plan, and track them with the same discipline you apply to cash and customers. It's a small change that compounds into speed, resilience and exit readiness."
Value creation depends on more than numbers; it depends on the people trusted to deliver them. By applying data-driven insights, facilitating first-100-days leadership alignment, supporting succession planning, and embedding disciplined operating rhythms, investors can ensure that leadership and culture actively drive the investment thesis.
Aligning people, processes, and priorities accelerates returns, mitigates risk and safeguards the exit story.
For more information on how Allura Partners and Frankie can help unlock leadership and culture value in your portfolio, get in touch with us today.