News and Insights

​Private Equity investors require unique skills to navigate the complex and fast-paced industry. That's where the PACE assessment tool comes in. Designed exclusively for the Private Equity sector, PACE has delivered several thousand assessments to date, helping identify and develop the key competencies needed for success.

Following the recent acquisition of Altus Partners by The LCap Group, Ed Chamberlain, CEO of Altus, and Sam Roberts, Chief Strategy Officer at LCap Group, took a deeper dive into PACE and how the innovative technology can deliver substantial value to the clients of Altus Partners.

- Altus Partners was acquired by LCap Group in June 2023

- LCap Group has a strong portfolio that includes Drax Executive Search, Rowan Group, and Leadership Dynamics

- Integration with these brands promises an expansive shared network and knowledge base

- PACE, an assessment tool, designed by LCap exclusively for the Private Equity sector, has delivered several thousand assessments

- PACE will now be offered exclusively to Altus Partners Private Equity clientele for enhancing their funds and portfolio companies

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EC: Sam, we are delighted to be an LCap company and excited to be able to offer the proven technology – PACE, to our clients. Can you provide an overview of the PACE Evaluation and its role within the platform?

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SR: Thanks, Ed, and welcome to the Group!

The PACE Evaluation is a comprehensive evaluation developed by LCap that assesses the behavioural traits and potential of leadership teams and individuals within leadership positions. It plays a central role within the LCap platform by providing valuable insights into leadership capabilities, strengths, and development areas. The assessment is designed to help our clients identify and nurture leadership talent, improve decision-making in leadership appointments, and enhance leadership effectiveness. We can now offer Altus Partners clients the ability to use this technology to make more informed decisions.

EC: How was the PACE Model of Development developed, and what were the key factors considered during its creation?

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SR: The PACE Model of Development was developed, over several years, through rigorous research and collaboration with leading occupational psychologists and academic experts and is the result of the largest study of its kind globally.

The key factors considered during its creation included the review of existing research. This is where the development team extensively reviewed existing research on leadership traits, behaviours, and the factors influencing leadership success. We also carried out a Private Equity Leadership Study, collecting data from hundreds of leaders across roles and industries to ensure the model's applicability and relevance across various contexts. And finally, a Psychometric Analysis. This is where the assessment underwent psychometric analysis to ensure its reliability and validity. The model was validated through longitudinal studies and feedback from real-world leadership experiences.

EC: What distinguishes the PACE framework from other leadership assessment tools in the market?

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SR: The PACE framework stands out from other leadership assessment tools in the market due to its Value Creation Centric Approach. The PACE evaluation comprehensively assesses various behavioural traits, potential, and development needs of individuals in leadership positions on a value-creation journey. We unapologetically focus on the business success, not the harmony in the team.

Further to this, its one of a kind Private Equity-Specific focus. The PACE framework is specifically tailored for the private equity industry, making it highly effective for clients in this sector. It is also research-backed, with the model being based on extensive research and collaboration with experts, ensuring its accuracy and reliability. And finally, the model takes a longitudinal Perspective. This means the assessment considers the long-term development of individuals, providing insights into potential growth and sustained leadership effectiveness.

EC: Can you explain the relationship between behavioural traits and successful value creation by senior leadership teams, as demonstrated by the PACE Model?

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SR: The PACE Model demonstrates that specific behavioural traits and competencies in senior leadership teams strongly correlate with successful value creation. Traits like growth mindset, curiosity, internal locus of control, self-monitoring, resilience, and the ability to foster collaboration and intuition are key drivers of value creation within private equity-backed businesses. By understanding and developing these traits in leaders, organisations can enhance their ability to make informed decisions, drive growth, and navigate challenges effectively, ultimately leading to increased value creation.

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EC: What research methodologies were employed to validate the effectiveness of the PACE assessment?

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SR: Great question, and this is core to the strength of the offering. The effectiveness of the PACE assessment was validated through three main research methodologies: face validity, concurrent validity, and predictive validity.

Face validity refers to the degree to which an assessment appears to measure what it intends to measure on the surface. In the case of the PACE assessment, during its development phase, experts, occupational psychologists, and relevant stakeholders reviewed the assessment items and components to assess whether they appeared to be relevant and appropriate in evaluating leadership behaviours within the private equity industry. Their feedback and input helped ensure that the PACE assessment's content was aligned with the specific traits and competencies desired in successful leaders operating in the private equity sector.

Concurrent validity assesses the degree of agreement between the results of a new assessment tool (in this case, the PACE assessment) and an already established and validated measure of the same construct. To establish concurrent validity for the PACE assessment, LCap, in partnership with Birkbeck College, administered the assessment to a sample of individuals in leadership positions within private equity-backed businesses. Simultaneously, they collected data from an existing, widely recognised and validated leadership assessment tool.

By comparing the scores obtained from the PACE assessment with the scores from the established leadership assessment tool, the researchers could determine whether the PACE assessment shows a strong correlation and agreement with the existing measure. A high level of agreement would support the concurrent validity of the PACE assessment, indicating that it effectively measures similar leadership traits and competencies as the established tool.

And Predictive validity assesses the ability of an assessment to predict future outcomes or performance based on its results. To establish predictive validity for the PACE assessment, LCap used the information of those who underwent the assessment and their business performance.

By analysing the correlation between the PACE assessment scores and the leadership outcomes, we can determine that the assessment effectively predicts successful leadership performance within the private equity industry. Strong positive correlations between PACE scores and demonstrated leadership success indicate high predictive validity. Our research around behavioural concentrations – or groupthink – in this space is particularly significant.

By employing face validity, concurrent validity, and predictive validity research methodologies, Leadership Dynamics could comprehensively validate the effectiveness of the PACE assessment as a robust tool for evaluating leadership traits in the private equity industry.

EC: How did collaboration with leading occupational psychologists and academic experts contribute to developing and validating the PACE framework?

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SR: Collaboration with leading occupational psychologists and academic experts was instrumental in developing and validating the PACE framework in several ways. Their leadership research and assessment expertise provided valuable guidance in designing a comprehensive and reliable evaluation tool. Input from experts ensured the PACE model was based on the latest research and best practices in leadership assessment. Collaborators contributed to the validation process by conducting independent reviews and analyses of the assessment's effectiveness. And their work on applying non-psychological data to produce behavioural projections enabled us to produce accurate, arms length behavioural evaluations.

EC: Could you give me some insight into the feedback received from private equity investment directors, executives, and non-executives regarding the PACE framework's application and relevance to their circumstances?

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SR: Feedback from private equity investment directors, executives, and non-executives regarding the PACE framework's application and relevance has been highly positive. Clients have reported that the assessment provided valuable insights into leadership potential, strengths, and developmental areas. The industry-specific focus of the PACE framework was particularly appreciated, as it allowed for tailored leadership development strategies in the unique context of the private equity sector. Clients also mentioned that the assessment contributed to more informed decision-making in leadership appointments and helped improve overall leadership effectiveness within their organisations.

EC: How does the PACE assessment support clients in understanding why some individuals thrive in the private equity environment while others struggle?

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SR: The PACE assessment supports clients by providing in-depth insights into their behavioural traits and growth potential. The assessment identifies specific competencies and traits that align with success in the private equity industry, such as adaptability, resilience, divergent thinking, and the ability to manage ambiguity. By understanding individuals' unique characteristics and development needs, clients can tailor leadership development programs, coaching, and mentoring to maximize their effectiveness in the demanding and dynamic private equity environment.

EC: Can you share any success stories or real-world examples where the PACE assessment has significantly improved leadership effectiveness and value creation within private equity-backed businesses?

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SR: Certainly, we’ve used PACE across LCap’s work with 142 PE funds and their portfolio companies in 2022. Broadly, there are four areas where PACE has had an impact.

The PACE assessment helped identify high-potential leaders who might have otherwise been overlooked, allowing organisations to invest in their development and nurture future leadership talent. The assessment results also led to targeted development plans for senior leaders, addressing specific behavioural traits and competencies critical for value creation in the private equity context. And the PACE evaluation contributed to more informed decision-making in leadership appointments, resulting in leaders better suited to drive growth and success within private equity-backed businesses.

Finally, by understanding the behavioural traits of their team members through PACE, senior leadership teams improved collaboration, communication, and decision-making, leading to more effective value creation.

EC: Thank you, Sam, for those incredibly informative insights. Last question, how can our clients access more information on PACE?

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SR: Contact any Altus Partners Consultant, or email us at info@altus-partners.com, and we will set up a meeting with our expert team, who will walk you through how the tool may work for you.