Most buyout firms describe themselves as operator-friendly. The data is thinner. Across the nine platform investments in our buyout funds, the founder or incumbent chief executive stayed for at least three years after we closed, and seven stayed for five years or more. That is not a coincidence. It is the result of how we structure deals, how we govern, and how we choose the companies we buy.
The first decision is whether the founder wants to stay. We pass on deals where the seller's primary goal is to be done with the business. A founder who wants to leave is usually leaving for a reason, and the reason is often that the next five years will be harder than the last five. We cannot pay someone to lead a business they no longer want to run.
The second decision is how we govern. We do not install a chief financial officer on day one. We install a reporting system, we agree on a quarterly rhythm, and we hire against the management team's own plan, not against our forecast. A founder who has run a profitable company for fifteen years knows more about the business than we do. Our job is to make their plan legible to a board, not to replace it with ours.
The third decision is how we structure liquidity. Most of our deals include a meaningful seller rollover, typically thirty to fifty percent of equity at close, with additional rollover on earn-out. That aligns the founder with the next decade of value, not the next quarter. We have also moved toward longer hold periods: the average holding period in our most recent buyout fund is seven and a half years, compared to five in our first.
The result is that we close fewer deals than our peers. We also lose fewer companies. Across the four realized investments in our first two buyout funds, the chief executive at exit was the same person as the chief executive at close in three of four cases. The fourth case involved a planned succession that the founder led himself.
We will keep reporting this number. If it stops being true, we will change how we invest.