PwC US Transformation’s Post

#PrivateEquity faces many of the same disruptive changes that have affected other industries. From a competitive talent market to a growing number of traditional funds, there is now a new playbook for driving digital #transformation within #portfolio companies: https://pwc.to/3KnoEHB

#PrivateEquity firms actively look for ways to optimize revenue, costs, and working capital in their portfolio companies by participating in risk-sharing arrangements with trusted partners. I had the pleasure to co-author the article with Jesper Strømann, Neto Alexander, Suzie Blinman, Felix Hessel, Himanshu Patney on how #privateequity firms are pushing the boundaries of operational value creation, leveraging strategic managed services. Strategic managed services add speed, boost predictability, and reduce risk for private equity firms. As such, they should be considered as part of every portfolio company’s full-potential plan regardless of size. https://lnkd.in/dAv5PPat

Why don’t firms improve after a failure? One reason, according to Tuck's Pino Audia, is that firms set too many goals, and this encourages them to downplay failures while highlighting wins—a tendency called “self-enhancement bias.” It’s more likely to happen when goals are ambiguous, or there’s little accountability, so stakeholders should be very specific about the desired outcomes and their hierarchy. “Private equity firms and activist investors generally do this well,” Audia shares, “but boards are often too lenient.” As society demands more of corporations, Audia thinks the problem of ambiguity in the assessment of performance in upper management will only grow. “This means it is safe to expect muted response to failure as the default,” he asserts. “Because top executives are increasingly confronted with a wide range of goals—economic goals but also environmental, social, and governance (ESG) goals—doing poorly on some goals while doing well on others, even when the latter goals are less important, generally offers a plausible way to form favorable overall interpretations of performance.” 

In the last two years, private equity firms have shifted their focus to value creation due to slowed exit activity and limited financial leverage. This trend has put technology at the forefront of investment strategies. It's great to see this highlighted in the new McKinsey & Company paper, which explores bridging private equity's value creation gap. Check out the paper here: https://lnkd.in/dBiFBf6W #PEs #valuecreation #privateequity #technology #McKinsey

This macro bite emphasis that current private equity (#PE) scenario is just not across US; Its a #global #economic situation. #Private #equity (PE) #CEO's are more optimistic about current situation and what future holds. Find out more 👇

I have always been keen to see if and when #stakeholder #capitalism will actually replace shareholder capitalism, and who corporations actually serve - I even remember some illuminating discussions we had on this topic with S. David Young, my favourite finance professor at INSEAD MBA, 20 years ago in Singapore... In this fresh Harvard Business Review article, the author argues that, while stakeholder analysis is a valuable tool for identifying risks and opportunities and leading to innovations that benefit both stakeholders and shareholders (e.g. on climate issues), much more is needed for stakeholder capitalism to genuinely replace shareholder capitalism. This includes a clearer definition of what stakeholder capitalism entails, stronger theoretical foundations, and practical tools for implementation, such as metrics and guidelines for making trade-offs between competing interests. I wonder how much of this is really possible to achieve and how soon. #Stakeholders #Shareholders #Capitalism #INSEAD #HBR

Our latest #PrivateEquity Pulse shares the themes and trends in the US PE landscape. Explore what leaders are positioning for in 2024 in the report below.

💡 What #trends are redefining the future of the wealth management industry? Deloitte, with ThoughtLab, conducted a global survey to understand how investor needs are changing the industry. 🔎 Explore the survey results ➡️ https://deloi.tt/42YNTbM #finance #digitalsolutions #sustainableinvesting

Tech Leaders: BDO has shared a list of its top 6 private equity trends to help your organization source the right deal or investment. Learn more. #PrivateEquity #TechIndustry

Bain advises PE to think about 3 imperatives given the changes impacting private equity: 1. Prioritize Value Creation: Emphasize organic growth and operational improvements over financial engineering to boost EBITDA in a high-interest rate environment. 2. Manage Portfolios Strategically: Assess and act on the financial health and potential of portfolio companies, considering immediate sales, debt restructuring, and innovative financial solutions to enhance returns. 3. Refine Fundraising Efforts: Professionalize investor relations and fundraising strategies, highlighting active management and strategic positioning to attract and retain LP investment. https://lnkd.in/gw_5PVcE