Private Equity

The world’s leading private equity (PE) firms generate tremendous shareholder returns.

While their investments are not immune to headwinds, they continue to outperform many of the major indices. Without question, much of this success is due to the early identification of outstanding investment opportunities. However, once purchased, the investment must perform. Our experience suggests that the astute equity investor will carefully manage and drive the performance of their investments with a team of seasoned and talented operating partners – people who have a clear view to future success and a track record of leading businesses effectively.

So how do they do it? How can businesses outperform their competition, create value, and realize lasting success? By observing our most successful clients, we have identified several business disciplines that PE owners apply to form a framework for success. While these fundamentals may sound basic, they are not easily achieved.

Let’s take a closer look:

· They hire senior managers who act like owners.

· They define a clear 3 to 5-year investment thesis and business strategy.

· They make their capital work hard and measure Return on Invested Capital.

· They measure other important value creating activities with an effective dashboard

· They determine whether senior management is adding or destroying value

Clearly, the first and last items on this list involve finding the right talent to lead the business.