Private Equity CEO Turnover: What the Deal Data Says About Timing and Returns

In three studies of large buyouts in Europe, the United States and the UK, about seven in ten companies changed their chief executive at least once under private equity ownership. For a private equity firm, the more useful questions are when the change happens and how it relates to the length of the hold and to the return.

The figures quoted in industry articles vary more widely. Two figures that appear often, 58% and 65%, both come from AlixPartners surveys, and neither counts how many companies replaced their CEO. Another, ‘more than 75%’, comes from a study of US buyouts and describes the share of new CEOs hired from outside the company. We have read the original reports and papers behind each of these numbers.

How often private equity firms replace the portfolio company CEO

Three studies follow real deals from acquisition to exit. Russell Reynolds Associates examined 196 European private equity exits completed between 2020 and 2025 by sponsors managing funds of more than €5 billion; in 135 of them, or 69%, the company changed its CEO at least once during the hold. Paul Gompers, Steven Kaplan and Vladimir Mukharlyamov studied all 192 US buyouts with an enterprise value of more than $1 billion from 2010 to 2016, and found that 71% had changed their CEO by the end of 2021, the cut-off for their data. Viral Acharya, Moritz Hahn and Conor Kehoe studied UK deals made by established private equity houses between 1996 and 2004, and found that the sponsor replaced the CEO at some point in 69% of them.

Francesca Cornelli and Oğuzhan Karakaş looked at UK companies taken private. In 46 of the 88 public-to-private buyouts they studied, covering 1998 to 2003, the CEO changed between the announcement of the deal and the first board record after completion. After that, CEO turnover at these companies fell to 9.2% a year, compared with 14.4% at similar companies that remained listed.

That result appears to conflict with the US study, which found annual CEO turnover under private equity ownership slightly above the rate at listed companies. The two samples differ. The UK study covers take-privates of listed companies from 1998 to 2003, where much of the change happened at the point of the deal, and the US study covers large buyouts of every kind from 2010 to 2016.

Most of the new chief executives come from outside the business. The US study found that more than three-quarters of the new CEOs were external hires, and that 67% had no earlier connection with the company as a director or executive. The authors compare this with earlier research on the S&P 500, where 72% of new CEOs were internal promotions. Russell Reynolds found that only 30% of the European companies that changed their CEO promoted an internal candidate.

Why the published figures disagree

AlixPartners publishes an annual survey of private equity firms and portfolio company executives, most of them based in North America, and industry articles repeat three of its figures. The firm’s own press release in March 2026 turned one of them into the headline ‘Nearly two-thirds of private equity firms replace portfolio company CEOs during the holding period’.

We use the AlixPartners surveys only for what private equity firms and executives say about CEO changes, and the deal studies for how often the changes happen.

When CEO changes happen during the holding period

The US study recorded the share of companies that changed their CEO in each year of ownership. The rate was highest in the first year, at 22.4%, and was 18.8% in the second. In each year from the third to the eighth, between 10.8% and 17.5% of companies changed their CEO. The authors describe this as modestly higher than the 11.7% annual rate for US listed company CEOs reported by Dirk Jenter and Katharina Lewellen (2021).

Russell Reynolds measured something different. Its authors recorded when each company had appointed the CEO who eventually led it to exit. Of the 135 companies that changed their CEO, 24% made that appointment in the first year of ownership, 15% between the end of the first year and the end of the second, and 61% after the second year.

Some appointments in the second year follow decisions taken soon after completion. The European authors note that an external search can take three to six months, and that notice periods and restrictive covenants can add a further six to 12 months. A board that decides to replace its CEO within weeks of completion may still not see the successor start until well into the second year. The same report found that 34% of the internally promoted CEOs who led a company to exit were the second, third or fourth chief executive appointed during the investment.

Some decisions are also taken late. In its 2018 survey of 53 private equity firms, AlixPartners found that 72% of those that had backed the existing management team at entry, and later replaced the CEO, waited more than a year to do so.

Late or repeated CEO changes and longer holding periods

In the European study, sponsors held companies that kept their original CEO for 5.5 years on average, and companies that changed their CEO once for 5.8 years. The average rose to 8.5 years with two changes and to 11.0 years with four. Where the CEO who led the company to exit had arrived in the first year of ownership, the average hold was 4.4 years; where that CEO had arrived after the second year, it was 7.7 years.

The US study measured returns. Its authors estimated a gross multiple of invested capital (MOIC) for each deal. Deals that hired an external CEO in the first year had the highest average, 3.09x, against 2.85x for deals that kept their CEO and 2.16x for deals that hired an external CEO after the second year. At the median, the early external hires recorded 2.72x, slightly below the 2.80x of deals that kept their CEO. Deals that changed their CEO at any point averaged 2.41x, a gap the authors describe as economically large but not statistically significant.

Neither study shows that the timing of a CEO change causes a longer hold or a lower return. Gompers and his co-authors point out that a change in the middle of a hold is likely to follow unexpectedly poor performance, and Russell Reynolds notes that repeated changes may indicate a more difficult investment. Part of the pattern is arithmetic. A company held for 11 years has more time in which to change its CEO, and a CEO appointed after the second year can only appear in a deal held for more than two years. The European study also includes only companies that reached exit. In the US returns data, the one statistically significant result is that deals with an external CEO hired in the first year outperformed the other deals by 0.65x on average, and that result is significant only at the 10% level.

Holding periods have lengthened

Private equity firms now keep their companies for longer, so a CEO appointed at entry would need to lead the business through more phases of the plan. Bain & Company’s Global Private Equity Report 2026, which uses PitchBook and Preqin data, puts the average holding period of buyout-backed companies at exit at 5.0 years in 2010, 6.2 years in 2019 and 7.0 years in 2024. By 2025, sponsors had held 39% of active buyout-backed companies for more than five years, against 29% in 2019.

A seven-year hold usually covers more than one phase of a value creation plan. A CEO who suits a cost reduction programme in the first two years may not suit the acquisitions or international expansion that the plan includes later. The deal team has to judge at entry whether the incumbent can lead each phase, or whether the board will need to change leader part of the way through.

Reasons investors and executives give for CEO turnover

When AlixPartners asked both groups in 2019 what drives CEO turnover, 93% of private equity respondents named a lack of capability and 69% a lack of urgency. The reason portfolio company respondents gave most often, at 72%, was a clash of working styles with the private equity firm.

The 2026 edition asked each side where the two are most often misaligned. Of the six issues AlixPartners reports, both groups named financial performance and meeting targets on time most often: 46% of private equity respondents named each of these, as did 37% and 39% of executives. The largest difference concerned the pace and scale of change, which 34% of private equity respondents named against 14% of executives. Executives were more likely to name talent strategy, communication between the two sides, and goals and incentives.

The private equity firm usually makes the final decision. In the 2026 AlixPartners survey, the private equity firm made the decision in 92% of unplanned CEO departures, and private equity respondents said their firm made the call in more than three-quarters of planned ones.

Steven Kaplan, Mark Klebanov and Morten Sorensen analysed detailed assessments of 316 candidates for CEO roles in companies backed by buyout and venture capital firms, and compared the ratings with the companies’ later results. Among the buyout companies, success was more strongly related to execution skills, such as following through and holding people accountable, than to interpersonal and team skills.

In our experience, a lack of capability and a clash of working styles often describe the same appointment. A CEO who performed well in a stable business may not move at the pace a sponsor expects, and the sponsor may not have stated at entry what pace it wanted. Many briefs describe the business as the private equity firm bought it. They tend to produce a CEO suited to that stage of the plan and not to the stage three years later.

The CFO changes almost as often as the CEO

Russell Reynolds Associates analysed 150 US portfolio companies of 17 private equity firms and found that 69% of their CFOs had taken up the role after the investment, a figure that covers every reason for the change. With two CFOs per deal on average over a five-year hold, Russell Reynolds estimates average CFO tenure at about 2.5 years, against 5.6 years for CFOs leaving listed companies. Acharya, Hahn and Kehoe found that the sponsor replaced the CFO in 61% of their UK deals, and in a third of all deals it did so within the first 100 days.

In the 2019 AlixPartners survey, 95% of private equity firms whose plan was to keep the existing team said they always or often intended to keep the CEO. Only 47% said their plan included keeping the CFO.

How private equity firms assess management before and after the deal

In the 2026 AlixPartners survey, 68% of private equity firms said they assess portfolio company leadership regularly and formally during due diligence. The share fell to 55% in the first 100 days and to 54% for the rest of the hold.

AlixPartners also asked about succession. Only 43% of private equity firms and 29% of portfolio company executives said they had a successor in mind for the CEO, and 61% of the private equity firms said that lining up a successor was not a priority or that they had no process for it.

A year earlier, the 2025 edition asked both sides to rate the portfolio company’s leadership team. Of the portfolio company executives, 43% said their team gave the company an advantage over its competitors; 10% of private equity respondents said the same of the teams at their portfolio companies.

Decisions for the deal team and the board

The private equity firm makes most decisions to change a CEO, and in both deal studies early changes went with shorter holds or higher multiples. In our work on chief executive appointments in investor-backed businesses, the timing of a change depends mainly on decisions taken at entry and in the first year.

At entry, a deal team that has doubts about the incumbent should test them against what the value creation plan requires in its later years as well as in its first. In a competitive auction the team may have little access to management before signing. If so, the assessment should take place in the first weeks after completion, and the board should agree in advance what it will do with the result.

The brief for a new CEO starts from the question we ask on every appointment, which is what problem the new leader has to solve. In a private equity business the value creation plan answers that question, so the brief should describe the job in year three as well as the job in year one. The brief should also state the pace of change the sponsor expects, the issue on which the 2026 AlixPartners survey found the widest gap between the two sides. The 100-day plan is the obvious place to set out what the first year should deliver and how the board will judge progress.

Assessment tends to lapse after completion. The share of private equity firms that assess leadership formally falls from 68% at due diligence to 54% during the hold, and fewer than half can name a successor for the CEO. A structured review at the end of the first year, using the criteria from the diligence assessment, gives the board evidence for any decision in year two. A named successor, or an interim executive who can lead the business while the board runs a proper search, reduces the risk of a hurried second appointment. In the Institute of Interim Management’s 2026 survey of UK interim managers, 37% said their most recent private sector assignment was with a private equity-backed or venture capital-backed client, more than for any other type of client.

If you are preparing for an acquisition or reviewing the leadership of a portfolio company, we would welcome a conversation about private equity executive search and the evidence behind this article.

Notes on the data

The deal studies cover large buyouts only, and most respondents to the AlixPartners surveys are based in North America. Two of the studies below cover UK deals, and the European study does not report UK exits separately. We list the sources in the order they first appear, and where a study is a working paper we cite the version we read.

• Russell Reynolds Associates, The CEO Decision: How PE Investors Select and Reassess Leaders from Entry to Exit (September 2026). The study covers 196 European exits from 2020 to 2025 by sponsors with funds of more than €5 billion. It includes only deals that reached exit, and the authors describe the link between CEO change and hold period as associative.
• Paul Gompers, Steven Kaplan and Vladimir Mukharlyamov, The Market for CEOs: Evidence from Private Equity, NBER Working Paper 30899 (January 2023). The study covers 192 US buyouts with an enterprise value of more than $1 billion from 2010 to 2016. The authors estimate returns as gross multiples of invested capital and describe their returns analysis as exploratory.
• Viral Acharya, Moritz Hahn and Conor Kehoe, Corporate Governance and Value Creation: Evidence from Private Equity, working paper (January 2009), later published with Oliver Gottschalg in the Review of Financial Studies (2013). The CEO and CFO figures come from 51 UK deals made between 1996 and 2004.
• Francesca Cornelli and Oğuzhan Karakaş, CEO Turnover in LBOs: The Role of Boards, working paper (March 2015). The study covers 88 UK public-to-private buyouts from 1998 to 2003.
• AlixPartners, Private Equity Leadership Survey: the 2017, 2018, 2019, 2025 and 2026 editions. These are opinion surveys of private equity firms and portfolio company executives, most of them based in North America. The 2026 edition had 427 respondents.
• Bain & Company, Global Private Equity Report 2026, Figure 17. Holding periods are averages for companies exited in each year, from PitchBook and Preqin data. Bain does not give a figure for 2025.
• Steven Kaplan, Mark Klebanov and Morten Sorensen, Which CEO Characteristics and Abilities Matter?, NBER Working Paper 14195 (2008), published in the Journal of Finance (2012).
• Russell Reynolds Associates, How to Attract and Retain Portfolio CFOs in a Competitive Market (February 2025). The analysis covers 150 US portfolio companies of 17 private equity firms.
• Institute of Interim Management, Interim Management Survey 2026. The figure refers to each interim manager’s most recent private sector assignment.