Women in PE to Know: Caroline Young

October 21, 2019

The interview below is part of an ongoing effort by McGuireWoods to profile women leaders in private equity (PE). To read previous profiles, click here. To recommend a woman for a future interview, email Amber Walsh at [email protected].

Caroline Young

Caroline Young is a partner at Hammond, Kennedy, Whitney & Company Inc. (HKW), a PE firm focused on making investments alongside talented managers in the middle market. At HKW, Young is the partner in charge of all HKW’s divestitures. Her experience collaborating with the operations teams to focus on growth initiatives and the eventual portfolio company exit has led to the sale of more than 20 portfolio companies. In addition, Young sits on the board of several portfolio companies and assists the sourcing team with the HKW Network. Prior to joining HKW, she practiced law at Wooden & McLaughlin. Young earned her law degree from the University of Virginia and her bachelor’s degree from the University of Vermont, graduating summa cum laude.

Q: What attracted you to PE?

Caroline Young: My path into PE is a bit unique. After graduating from law school, I became a litigator, trying cases that ranged from a dodgeball incident to a multimillion-dollar cost-overrun suit involving the stealth bomber. The skills I gained through trial work were invaluable. I honed my ability to pull together disparate facts and law to create a compelling story; to stand in front of and win over my audience — in that case, a judge and jury; to read people and situations; and to mediate and negotiate. However, I did not enjoy the battle, arguing over who was responsible for something that went wrong, rather than focusing on how to make something better.

When I learned of an opening at HKW, I did my research. I loved the fact that PE is about enhancing companies by improving their operations, helping to strategize on growth initiatives, building up great teams and then finding the next partner that can continue to move those plans forward. PE is easily maligned; what is often lost is the fact that our fundamental mission is to take great companies and make them even better.

Q: Why is it important for more women to pursue careers in PE?

CY: Multiple studies have found that adding women to all-male teams leads to greater success. Teams with both genders have shown to be more creative, have more effective decision-making, higher worker engagement and improved company financial performance. Adding differing perspectives and strengths improves results. I am a firm believer that improved gender balance in our industry will lead to better collaboration and firm cultures.

PE is a great career for women. The work can be high-stress and demanding, but it is also extremely rewarding. You learn about different industries, meet fascinating people and master new skills. 

Q: What is your advice to PE firms and investment banks that are seeking to increase the number of women at their firms?

CY: There are so many incredibly talented women who would make outstanding additions to PE firms and investment banks. However, firms need to be open to hiring women with varied backgrounds. If firms are only looking for senior-level women who have taken the standard path through PE and investment banking, they are artificially limiting the pool of qualified candidates. For example, women with operations, accounting, consulting or legal backgrounds can bring different strengths and perspectives that will ultimately add great value to these firms. I am so thankful that HKW recognized the strengths I brought to the table and enabled me to create a role that plays to those strengths.

Once firms find and hire these talented women, I encourage them to be mindful of their cultures. Most firms are made up almost entirely of men at the senior level, which heightens the importance of fostering an atmosphere that is open and inclusive. If these firms aren’t able to create a sense of belonging and mutual respect, women are not going to want to stay.

Q: What advice would you provide to a woman-led company interested in securing PE?

CY: My advice to a woman-led company considering a sale would be the same as my advice to a male-led company: If you are considering a sale of your business, there are a number of steps you should be taking to prepare for the sale process.

First, make sure your house is in order. The sale process will entail a deep dive into all aspects of your business. You must have your books and records organized and well-documented, and I highly recommend securing a sell-side quality of earnings report to address any accounting issues before a sale process. If there are detractors to the business, spend the time to address them and reduce their impact. Likewise, it is incredibly important to put together granular and well-thought-out forecasts for the next three to five years.

When you think about the timing for a sale, here are a few additional items to consider when going to market your business:

  • Make sure you have good visibility into the next six months. You must hit your numbers throughout the sale process. Likewise, be cognizant of relevant industry trends and how they are likely to impact your business and buyer interest.
  • Retain good advisers, investment bankers who understand your industry and lawyers with strong merger and acquisition backgrounds.
  • Take the time to step back and think about what you want as a result of the sale. Do you want to keep running the business and get a second bite at the apple? Are you looking for the last dollar? Is a good fit with the next buyer a driving force? The answer to these questions may impact how you think about your pool of potential buyers.
  • If you are contemplating a sale to PE, which I would encourage, do your diligence. Call other portfolio company executives managed by the PE company and ask what it is like to work with that firm and those individuals. Not all firms are created equal, and the right fit is extremely important. 

As you can tell, I am a huge fan of PE and I am proud of the way HKW partners with our management teams to make our companies better.

To contact Young, email [email protected].

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