Carve-out deals are becoming a key feature of the UK Private Equity market. As corporate businesses refocus on core operations and streamline portfolios, and investors seek value in a high-price, low-growth climate, carve-outs offer a compelling opportunity.
Yet despite their appeal, carve-outs are challenging to execute, demanding pace, precision, and leadership. The right interim talent makes the difference between a smooth transition and stalled value creation.
Indeed, McKinsey 2023 research shows that roughly 70 percent of post carve-out transformations fail because of a lack of effective interim leadership.
The UK carve-out market: A growing opportunity
Across the UK, large companies are selling non-core assets. For PE firms, this unlocks access to strong businesses that may have been underinvested, constrained by operations, or simply overlooked within larger groups.
These businesses often have loyal customers, well-known brands, and platforms primed for growth. With focused ownership, and independence from the parent company, they offer genuine transformation potential and rapid performance gains.
However, carve-outs differ significantly from traditional buyouts. From day one, investors must manage complex operational separation while simultaneously pursuing new commercial opportunities.
Why is the execution risk higher?
In large companies, many critical business functions, such as IT, finance, HR, procurement, and governance are often shared across business units. During a carve-out, these hidden connections quickly become visible. Relationships that were strong during due diligence can weaken during separation, revealing operational blind spots. Transitional Service Agreements, or TSAs, often prove more complex than anticipated while teams face cultural disruption and unclear leadership structures.
Together, these challenges put significant pressure on the first 100 days after deal closure.
As such, investors need to:
- Establish standalone systems and governance
- Stabilise the leadership team.
- Retain key talent.
- Rebuild commercial momentum.
- Deliver early performance signals for stakeholders.
This must happen amid uncertainty, and whilst acting quickly, under stricter scrutiny. This period is when value is either protected or lost for good.
Interim leaders are the essential piece of the puzzle.
Permanent leaders are critical for long-term success, but finding and onboarding them takes time. Time that carve-outs rarely have.
That’s why specialist interim leaders are now essential. Experienced interim CEOs, CFOs, COOs, and transformation leaders bring immediate, practical expertise in:
- Business separation and stand-up
- TSA management and exit
- Commercial and operational stabilisation
- Rapid governance implementation
- Early-stage value creation
They operate without bedding-in periods, internal politics, or steep learning curves. They lead through ambiguity, create structure at speed, and lay the foundations for long-term leaders to succeed.
Today, interim leadership is not merely just a stop-gap. It has become a core strategy for investors managing complex deals.
The first 100 days: where carve-out value either lost or gained
The first phase of a carve-out is high-pressure. Stakeholders want clear answers, teams need guidance, systems must operate independently, and customers seek reassurance.
Without strong leadership, progress can stall: decisions lag, confidence drops, and value creation can falter. Though with the right interim leaders in place, carve-outs can quickly gain forward momentum:
- Operational independence is achieved faster.
- Early cost and performance levers are pulled.
- Talent gaps are stabilised.
- Permanent leadership transitions become smoother.
- Investor confidence increases
The real difference lies in execution, not strategy.
A market that rewards investors who are ready
As carve-outs become more common, the most successful investors will treat talent strategy as integral from the start. Bringing in experienced interim leaders at the right time boosts the odds of retaining existing value, reducing risk, and building scalable businesses.
At The Siena Partnership, we work with Private Equity clients to provide specialist interim talent, reducing carve-out risk and accelerating value creation from day one.
If you are planning a carve-out or are in the middle of one and would like to talk, please connect with one of our Private Equity experts, Caspar Benson.