How Do Private Equity Investors Create Value? A Summary of Findings from Ernst & Young’s Extensive Research in North America over the Past Four Years

Abstract

For the past four years, Ernst & Young has conducted indepth annual surveys in North America on the largest private equity (PE) investment exits, to enable disciplined quantitative analyses for the purpose of identifying the major drivers of investment return. The results have been published and presented regularly in various forums, and each edition of the annual E&Y PE Value Creation Study (as it has become known) delves into new areas of investigation to keep the current findings innovative and fresh. This article presents for the first time a coherent and cumulative summary of the major findings from all of the editions of this substantive PE exit research and analyses over exit years from 2006 to 2009 for the largest PE exits in North America.

TOPICS: Private equity, developed, quantitative methods, financial crises and financial market history