With valuation gaps continuing to slow deal activity across the UK, many top PE houses are focusing on enhancing their value creation capabilities. Building on data presented in KPMG’s UK Private Equity Landscape report for 2026, this article explores how they are doing it.
Straight up multiple expansion is no longer a surefire path to value creation. And the leading PE houses recognise it. As such, we are seeing significant investment going into setting the groundwork for great operational value creation.
Take AI for example. Everyone knows that AI is rapidly changing the dynamics and return equations for many businesses across a wide swath of sectors. If you are the owner of a professional services platform or a software business, for example, you are probably keenly aware of the risks and opportunities that AI could bring. Implement it on the right foundations and in the right areas, and you could see costs plummet and revenues rise. Wait too long, however, and your competitors could beat you to the punch, destroying the value you had created in a matter of months.
The problem is that AI requires three big things: a strong data foundation, robust digital capabilities and deep insight into how and where to apply it. To address the latter two, many PE houses are now actively hiring new operating partners and technology experts with the know-how and experience to help their portfolio companies rapidly assess and build capabilities and insight. And it’s not just AI geeks. One of my clients recently hired operating partners for cyber security and for ERP – two foundational areas for successful AI implementation.
