Capability at the Center of Private Equity Value Creation
Private equity value creation has evolved dramatically, shifting from reliance on leverage and multiple expansion to a focus on operational excellence. Operating partners now drive 47% of value creation, a significant increase from 18% in the 1980s. This transformation emphasizes execution over mere planning, with funds that prioritize capability building seeing a 2-3 point IRR premium. As the industry faces compressed entry multiples and heightened LP scrutiny, the ability to deliver on operational initiatives has become crucial. Discover how leading firms are adapting their strategies to thrive in this new landscape and what it means for future value creation.
