PE funds need to shift their focus from their

  1. PLAN A: Market-Led Value Creation i.e. realising financial value through financial engineering or divestment
  2. to PLAN B: Business-Led Value Creation, i.e. improving the underlying ability of a business to sustainably deliver superior free cash flow.
  3. Creating value from the core of a business needs to be high on the investors’ agenda.  The challenge is whether “business led value creation” is achievable in the current economic and financially uncertain environment, and if it is, then how to focus the executive management team to deliver against the potential.

Our findings are taken from an article written by Toby T and Gerald H, “Challenges Facing Private Equity Backed Investments”