Optimizing private equity exits and enhancing business performance
An uncertain global environment means it has never been more important to start laying the foundations for exit earlier in the investment lifecycle.
Early exit planning, strategic technology investments, sector-specific knowledge, and management alignment are crucial for optimizing exit prospects and driving sustainable growth in private equity, say KPMG’s Paul Pan and Gavin Geminder in an interview with Private Equity International Magazine.
Key interview takeaways
Read the PEI article to learn key insights on the following topics.
1
Early Exit Planning:
- Establish early view on potential exit options, using it as a lens on how to prioritize investments while building great businesses.
- Optimize performance through initiatives like zero-based budgeting, technology investments, and sector-specific value creation.
2
Leveraging Technology and AI:
- Integrate technology and AI to build sector and sub-sector databases with industry-specific metrics and KPIs. into portfolio companies by identifying relevant use cases and implement quickly where there is clear benefit
- Start testing and implementing AI solutions early in investment lifecycle to substantiate benefits well ahead of any exit process.
- Invest in technology for financial consolidation and analytics as a building-block to enable transformation management office (TMO) prioritization and tracking.
3
Sector-Specific Knowledge and Management Alignment:
- Identify industry-specific top-line and cost metrics and align to portfolio company value creation journey through cash conversion and working capital.
- Articulate back-office capabilities and services the PE owner platform can offer portfolio companies, providing management clarity to focus on growth, profitability.
- Align management teams with exit objectives and ensure they understand proposed timeline and focus on controllable factors.
Historically, private equity firms have been reluctant to spend big money on the back office unless they really had to. Now that optionality has gone.
Gavin Geminder
Private Equity Advisory Sector Leader at KPMG U.S. and Global Head of Private Equity at KPMG International
Implementing AI solutions early on, so that you can substantiate the benefits well ahead of any exit process, is imperative.
Paul Pan
Private Equity Leader at KPMG Strategy
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