A naukri.com initiative
Peprofessional
1M
174
Rapid Evolution: How the Growth of Strategic Capital is Fueling a New Approach to Value Creation
- Private equity GPs focus on value creation in their existing portfolios, with add-ons increasingly becoming a key ingredient in the private equity playbook.
- The median hold period at exit continues to stretch longer, and the proportion of add-on acquisitions as a percentage of total investment activity reached 75%.
- Strategic capital solutions are facilitating mid-hold value creation efforts that were not always available in the past.
- These solutions seek to facilitate M&A or organic growth initiatives, cross-fund investments, shareholder consolidation, or other similar initiatives.
- Mid-hold strategies help GPs capitalize on the work they’ve already put into their portfolio companies to drive further equity value in the business.
- ASC’s specific mandate is centered on minority, non-control investments to facilitate predictable value creation within portfolios.
- Mid-hold equity strategies provide another tool that allows sponsors to drive long-term growth and draw on private equity’s role as a provider of patient capital.
- Valuations remain historically high; sponsors aren’t generally counting on multiple expansion unless they’re able to drive top- and bottom-line growth.
- Mid-hold equity solutions are a way to meet the needs of today’s sponsors in looking to drive long-term value.
- The growth of the segment is untethered to the current economic and market backdrop.
Read Full Article
10 Likes
For uninterrupted reading, download the app