Capcade’s Post

In a slower deal environment, private equity firms are looking to boost value creation. How? As McKinsey reveals, one strategy gaining traction involves a renewed focus on enhancing operational efficiency. By improving operations, private equity firms can find value in their portfolios, even in tough markets. This approach acknowledges that traditional methods may not suffice in the current landscape and underscores the importance of adaptability and agility in driving sustainable growth. #PrivateEquity #ValueCreation #OperationalEfficiency

In this McKinsey article, the authors outline the need for private equity buyout managers to adapt their approach to value creation, with a particular emphasis on improving operational efficiency.

PE - "Invest with operational value creation at the forefront" ( McKinsey & Company ) - invest with operational value creation at the forefront - bring best-of-breed capabilities to portfolio companies - everyone should understand and have a hand in improving operations - shift from “buy and hold” to “acquire, align on strategy, and improve operating performance” --------- #business #portfolio #pe #privateequity #valuecreation

Wow! McKinsey nails it as you might expect. This paper is absolutely spot on for todays strategic and operating vision for PE sponsored assets and platforms. A must read and save document for all management and investor teams. Well done Team McKinsey and thanks for pulling this great resource together for all to utilize and incorporate into your thinking.

This is an excellent “must do” #checklist from pre and post closing hitting the #strategic, #financial, and #operational value drivers all throughout the life stages of the investees. #valuecreationplan #buyout

Times have changed, we all know it. Financial value creation through declining interest rates and escalating asset prices, the post powerful levers for PE investors over the past 40 years, has gone. Now it's about operational value creation. But it's not about one-time or business-as-usual operational efficiency improvement efforts. It's about investing with operational value creation at the forefront, before signing, not only to understand where to create value during the holding period and beyond, but also to build a robust execution plan and align all stakeholders including management. It's about deep transformation and shared accountability. It's about people, capabilities and governance. Our latest research shows a significantly higher IRR potential for best performers. Have a look and let's talk about it! #PrivateEquity #ValueCreation #McKinsey #Transformatop,

Times have changed, and so has the focus of private equity investors. It's no longer just about financial value creation through interest rates and asset prices. Our latest research shows that operational value creation is the new focus, with significantly higher IRR potential for best performers. Investing with operational value creation at the forefront is key. It's not just about one-time improvements, but deep transformation and shared accountability. It's about people, capabilities, and governance. Before signing, it's crucial to understand where to create value during the holding period and beyond, and to align all stakeholders, including management. Interested in learning more about private equity and value creation? Check out our latest research and let's talk about it! #PrivateEquity #ValueCreation #McKinsey #Transformatop

In the current inflationary market, PE’s value creation model must embed Operating Performance. Once a nice-to-have, this is now essential for achieving expected returns. Specially for smaller and mid-market companies, the Operating Partner has become an essential ingredient in unlocking value creation, moving from backseat to frontseat. The Operating Partner is crucial to drive bespoke margin expansion strategies to offset compressed multiples and potential valuation mismatches. Bridging private equity’s value creation gap - Private Equity & Principal Investors Practice - McKinsey & Company

The private equity landscape is evolving rapidly. One key trend for 2024 is the increased focus on operational enhancements to drive profitability. With the cost of debt higher than it was in the pandemic years, PE firms are prioritizing value creation through efficiency improvements and strategic growth initiatives. Learn more about how these trends could impact your business and opportunities in the market in this article from Morgan Stanley. #privateequity #growth #salesleadership https://lnkd.in/gxeRifih

This is a good article, as a slower deal environment forces private equity firms to adapt their approach to value creation. And the management teams are essential. They create the actual value. ➡ Follow us for more! Link: https://lnkd.in/eEYMrJj7 #PrivateEquity #ValueCreation