A Private Eye for Private Equity

Abstract

Private equity investors scouring their portfolios for more value almost always come up with the same ideas, such as dropping unprofitable products and buying more technology. But more than 80%; of potential improvements in their companies don’t require new technology. They hide in the largely unexamined busyness of “knowledge workers.” In almost all business operations that occur away from the factory floor, wasted, avoidable work tasks are often disguised as virtuous—even heroic—effort. That’s how they get dismissed as valuable improvement opportunities. They are not insignificant, but finding them requires a detective like approach—new ways to see the familiar and new places to search. More-conventional strategies will not deliver the competitive advantage private equity investors need.

TOPICS: Private equity, equity portfolio management, portfolio management/multi-asset allocation, performance measurement