TY - JOUR T1 - Proactive Portfolio Management JF - The Journal of Private Equity SP - 72 LP - 82 DO - 10.3905/jpe.2004.391051 VL - 7 IS - 2 AU - Dan Lieber Y1 - 2004/02/29 UR - https://pm-research.com/content/7/2/72.abstract N2 - Increased competition and a change in economic conditions have permanently changed the expected returns of private equity funds. As a result, successful private equity firms will be required to add value through an active and disciplined portfolio management process. The author describes a comprehensive, proactive portfolio management process and related tools that have been successfully implemented at a leading private equity fund. The article reviews investment oversight tools such as summary scorecard preparation, exit plan development and scenario modeling, systematic risk/opportunity assessment, and the creation of deal team action plans, along with specific examples of “real world” applications. The suggested approach can help private equity firms realize improved performance by accelerating their response to early warning signs such as key performance indicators; achieving better alignment of deal team and company activities with the ultimate exit plan throughout the life of an investment; optimizing the timing and positioning of an investment exit; and improving the management of the private equity firm's professional resources. ER -