Up-and-Coming Women in PE to Know: Naile Kovuk

March 31, 2020

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 [email protected].

Naile Kovuk

Naile Kovuk is a principal at Hughes & Company, a boutique PE firm investing in lower middle-market business with a focus in healthcare information technology and services. She joined the firm more than five years ago and is responsible for originating, evaluating and executing investment opportunities, in addition to monitoring portfolio companies. Kovuk was previously a trader at DRW Trading Group, where she managed a portfolio of fixed income and foreign exchange products. She started her career as a software engineer at Trading Technologies. Kovuk received a dual bachelor’s degree in computer science and economics from Northwestern University.

Q: What both attracted you to PE but potentially concerned you about this chosen career path?

Naile Kovuk: I wanted to move into PE mainly because I was very attracted to the ability to influence the trajectory of investments. At Hughes & Company, we take an active role in all of our investments and work closely with management teams. I enjoy thinking strategically about how to grow businesses and their operations. Whether helping existing portfolio companies, sourcing and executing new investments or fundraising, so much of what we do requires a combination of relationship-building and analytical thinking.

Previously, when I was trading, my universe was much narrower, and my success didn’t depend as much on relationships. I only had my own profit and loss (P&L) to worry about. I always enjoyed working with numbers, creating models and looking for patterns. But I wasn’t satisfied with what I did, day to day, without that human interaction. In PE, what we do requires a similar type of logical reasoning to trading, but we also need to skillfully cultivate and manage relationships.

I keep an open mind when interacting with others and let conversations take their own course. I try to learn and be helpful as much as I can, sometimes in ways I could not initially foresee. Once you lay the groundwork, more often than not, partnerships end up forming serendipitously as pieces of a puzzle when the time is ripe.

On the other hand, when I was trading, I knew my P&L at the end of every day. This can be difficult to manage, and it’s important to be even-keeled through good and bad days. In PE, it takes years to see the value of our investments with absolute certainty. We update our valuation marks as companies and markets evolve, but it takes years to realize those returns.

This is a different type of risk, spread over a longer time horizon. I was initially concerned this could create an uncomfortable uncertainty for me. But if we want to generate returns, we have to take risks. And, if anything, in PE we get a lot more insight to our investments and can play an active role in their growth.

Q: Who is an example of someone who inspired you in PE and why?

NK: Sarah Wuellner, a partner at Promus Equity, was very instrumental during my career transition into PE, giving me honest and pragmatic feedback. She has been a great mentor since then. She taught me that it’s important to be persistent and confident to make it in PE, and as women, we need to create a community where we can support each other. When I express my gratitude to her, she tells me if I want to do something in return, I should mentor and support younger women entering the field when I can.

This is a very competitive and small field. So much knowledge is undocumented. Knowing how much Sarah has contributed to my success in this field, I feel a responsibility toward the younger generation of women entering PE and those pursuing a path of entrepreneurship.

Q: How do you believe women of your generation will be able to influence the PE industry, particularly as the career path continues to evolve?

NK: When studying computer science at Northwestern, I was one of only two women in my class doing so. When I first started trading at DRW, I was the only woman on a team of 24. For a very long time, until I witnessed the support of women networks in PE, I did not fully appreciate the value of women colleagues.

In the Chicago area, we women in mid-level PE positions get together on a regular basis and share stories. We know the challenges we face in the workplace and share tips on how to manage our personal and professional lives. We look to each other for support and ideas. I am very grateful to have met the brilliant women in PE in Chicago. They inspire me, and I feel pride in their successes.

As women in PE, it’s important for us to help women founders and executives with their businesses even when they don’t fit our investment criteria. Whenever I can, I try to make introductions for them that could be meaningful and helpful for potential partnerships, new clients or investors. I advise them on what’s reasonable or market for employment agreements or executive compensation, help them work through issues or conflicts in their boards and try to strengthen their positions within their companies.

As PE professionals, we have so much exposure to businesses. We can be a great resource to women entrepreneurs. These women, later in their careers, could be those who manage PE-backed businesses. By helping them achieve success with their current companies, we can have an impact on increasing diversity in our field.

Q: What is a lesson that you have learned concerning what’s required for success in PE?

NK: One of the lessons I learned early on at Hughes & Company is to balance patience and urgency. There is always an underlying urgency in what we do. Whether that’s for comprehensive diligence for a timely close, making the right hire for a portfolio management team, negotiating terms with prospective sellers or finding the next investment, we hustle with a sense of urgency. On the other hand, our job requires patience: patience to find the right business to invest in, patience to harvest the results of initiatives the portfolio companies undertake and patience to properly position a business for a successful exit.

Much of our success depends on making good decisions on when to act with patience and when to act with urgency.

To contact Kovuk, email [email protected].