Value creation: A trend that impacts private equity

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Private equity's third wave

Private equity (PE) has become a permanent and increasingly large and diversified form of investment in today's capital markets. The leading firms attract a disproportionate share of incremental capital and have found new platforms to deploy this capital. And while the entirety of the buy-out component of private equity capital continues to rise, the proportion of total capital dedicated to buyout at the major firms is going down (primarily to the faster growth of alternative platforms).

PE is now a truly mature market, with lots of competition for non-proprietary sourced deals, challenges to finding proprietary deals and intense performance pressure on already deployed capital. It is our perspective that PE is in its third wave. If the first was financial engineering, and the second operational engineering, the third wave is defined by the requirement to pull on a full suite of value creation levers on every asset to achieve its full potential.

The competitive characteristics of this third wave is shaped by the realities of a longer hold time and the fact that so much capital is chasing premier assets. The pressure on PE firms has grown enormously as corporates and other players grab a bigger piece the deal market.

How PwC can help

PE firms need a trusted team of advisors who can deliver seamlessly across the private equity lifecycle. PwC has a dedicated practice focused exclusively on value creation for private equity firms. We bring deep industry expertise, a transparent record of PE diligence, and relevant industry and consulting experience to our work with private equity and portfolio management companies to help our clients with solutions that are both practical and comprehensive. From deal strategy, to target approach and execution, to closing and post-acquisition support, our teams work closely with you to create sustainable value. Learn more about...

Value creation

Our Private Equity Practice

 

Contact us

Thomas Godward

Partner, PwC US

Patrick Gordon

Principal, Private Equity Value Creation Team Leader, PwC US

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