Value creation in private equity

2006

Private Equity and Venture Capital funds are faced with high return expectations by their investors that only few in the industry can meet.
Acquisition of investments becomes more and more difficult. Therefore, the value creation only by "dealing" with companies is very limited

To separate oneself out of the industry average requires usage of all available levers for value creation especially in the holding period
The lever for the exploitation is the application of established management tools – restructuring, portfolio management and value management. In the application of these tools, the Private Equity fund manager has to demonstrate his superiority above "normal" conglomerate management.

As a conclusion, a successful Private Equity fund manager must be a company-dealer and a top manager in one person or at least must be able to manage both sides of the coin.