Nearly two-thirds of private equity firms replace portfolio company CEOs during the holding period, AlixPartners survey finds

Misalignment between investors and portco management is slowing transformation, complicating AI investment, and increasing leadership turnover

• 27% of PE firms say underperforming assets are rising
• Four in ten PE-owned companies expect AI to cut more than 10% of jobs
• Only 9% of PE firms said they “rarely” replace CEOs

NEW YORK (March 25, 2026) - Nearly two-thirds of private equity firms replace portfolio company CEOs during the holding period, according to a new survey by AlixPartners, the global consulting firm. The 11th Annual Private Equity Leadership Survey from AlixPartners highlights the intense leadership pressure inside PE-owned companies and the growing challenges of executing value-creation strategies in today’s volatile environment.

The global survey—drawing 427 responses from private equity leaders and portfolio company executives—finds that despite broad alignment between investors and management teams, key, critical tensions exist that can slow transformation, undermine strategy execution, and complicate investment decisions around technologies such as artificial intelligence. 

“The private-equity model works best when investors and management teams are tightly aligned around how value will be created,” said Madalyn Miller, Partner & Managing Director in AlixPartners Private Equity practice.  “But when expectations diverge—on the pace of transformation, on investment priorities, or even on what success looks like—it has the potential to lead to leadership changes and lost momentum.”

Investors push growth while portfolio companies fight costs

Although both sides agree that growth, operational performance, and hitting enterprise value targets are the top challenges facing PE-backed companies, the survey reveals meaningful differences in priorities.
Private equity investors place significantly greater emphasis on top-line growth, AI adoption, and acquisitions, while portfolio company executives are more focused on margin management, debt burdens, and operational risk. Those gaps can create friction during the holding period—especially as portfolio companies transition from early cost-cutting initiatives to longer-term growth and transformation strategies.

Leadership turnover remains a costly reality

Executive turnover has become a defining feature of PE ownership.

• 65% of PE firms report CEO turnover during the holding period.
• 38% of portfolio company executives worry about losing their jobs due to disruption, far higher than at companies without PE investment.
• Only 9% of PE leaders say their firms rarely replace CEOs. 

While leadership change can unlock performance, it comes at a cost. Earlier AlixPartners research found 83% of PE executives say unplanned CEO turnover lengthens holding periods, and nearly half say it reduces returns. 

“Too many private equity firms are still reacting to leadership crises instead of preventing or anticipating them,” said Ted Billies, PhD, Global Leader of Transformative Leadership and Partner & Managing Director at AlixPartners. “A structured talent strategy—continuous leadership assessment, clear succession planning, and alignment around the deal thesis—can prevent value from eroding before action is taken.”

AI investment revealing new divides

Artificial intelligence is emerging as another flashpoint between investors and management teams.
Portfolio company leaders are more than twice as likely as PE investors to say they are satisfied with the results of their AI investments, suggesting expectations and outcomes may not yet be fully aligned. 
Most companies are currently using AI for near-term operational gains such as productivity improvements, analytics, and sales effectiveness, but investors increasingly see AI as a catalyst for deeper business model transformation. 

"We're seeing portfolio companies making big gains in productivity. But AI is also changing industry valuation, and PE firms need to get on top of that," said Jason McDannold, Americas Co-Lead of Private Equity and Partner & Managing Director at AlixPartners. “At the same time, smaller firms lag larger peers in AI adoption, creating a widening capability gap across the industry.”

Performance pressure building across portfolios

The survey also underscores rising pressure across private equity portfolios:

• 27% of PE executives say the number of underperforming assets in their portfolios has increased year over year.
• Portfolio company leaders expect mostly moderate growth ahead but more foresee flat or negative growth than a strong year.
• Nearly half of respondents say finding buyers is difficult, extending holding periods and increasing pressure on operational performance. 

The report concludes that stronger leadership alignment, more proactive talent strategies, and disciplined AI investment will be essential to sustaining private equity returns in the coming years.

About the Survey
The AlixPartners 11th Annual Private Equity Leadership Survey gathered responses from 427 executives, including 174 leaders from private equity firms and 253 portfolio company executives, making it the largest survey in the study’s history. To access the full report, please click this link.
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About AlixPartners
AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.

Contact:
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