Value creation addresses a major conundrum currently faced by investment funds. Private equity is booming, holding historic highs of capital with billions in “dry powder” ready to be invested. The problem? Too many competitors and not enough quality deals are forcing funds to bid acquisition prices up to unprofitable levels. How does a firm set itself apart from the crowd?
Value creation functions on a single guiding principle: the more involved in its portfolios an investment firm is, the greater its returns.
That’s why the industry has created the role of operating partner and teams of value-creation professionals. These experts add value to fund investments through means beyond the traditional prescription of leverage, low-cost capital, and financial engineering.
This research will cover best practices and common challenges in the field
- History and why it works
- Roles within an investment firm
- Hiring best practices
- Structuring the team
- Common pitfalls to avoid
With these best practices, a value creation team can increase the profitability of a firm’s investments and generate more revenue across the board.