The new report from Alix Partners, the turnaround and restructuring specialists, is likely to cause significant concern amongst CEOs contemplating a management buy-out.
However, my experience working with clients, both management teams and private equity houses, contradicts the alarmist headlines in the report.
In the majority of cases, a change of CEO in a PE-backed business is usually well thought through as part of a wider management succession plan which the whole Board buys into and which forms part of the ultimate exit strategy for all shareholders.
Not all CEOs who undertake a buy-out see themselves as the CEO in three to five years' time and therefore management change is essential in the investment cycle, with the original CEO sometimes moving into a consultancy or non-executive role.
As such, beware alarmist headlines from people who make money when things go wrong in buy-outs and PE-backed CEOs should sleep easily at night.
More than half of portfolio company chief executives are sacked by their private equity owners within the first two years of investment, a new report by Alix Partners and Vardis reveals.