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US recruitment company launches private equity co-investment fund09/12/2003. Source: AltAssets. 
 US executive search company, Pinnacle CEO Recruiters, has launched a private equity fund to make co-investments in business services companies it places CEOs in.
‘There is a fundamental problem in the executive search industry at CEO level right now, in that executive search firms are largely focussed on receiving a one-time fee with a CEO placement, with sometimes little consideration for how the CEO will perform long-term,’ said Pinnacle president Chad Mollman.
‘Forming a private equity fund to invest in companies Pinnacle places CEOs in, more closely aligns our interests with our clients,’ Mollman continued. ‘With this new fund, we benefit if the CEO and company perform well, but also suffer if the CEO and company do not perform well.’
In the late 1990s a number of executive search firms established venture capital funds to invest in early-stage dotcom companies, but since then recruitment companies have been reluctant to invest in the companies they place CEOs in.
Pinnacle CEO Recruiters focuses exclusively on recruiting CEOs for private equity firms with executive sponsorship programmes, where the firm partners with a CEO first, and then works with that CEO to acquire a company.
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