Over the past 25 years, private equity has continually reinvented itself.
At first, leverage played a key role in value creation. Then the focus shifted to growth, professionalization, and buy-and-build. According to an analysis by Dawson, a new phase is now beginning: active management. That is precisely where new opportunities lie.
Private equity firms have structural advantages. They are closely involved with their portfolio companies, have direct influence over strategic decisions, and have the capital and a long investment horizon to implement substantial changes.
Making better use of strengths
The next step is to leverage that strength even more effectively. Not only by driving revenue growth, but also by improving processes, applying technology more intelligently, and structuring organizations more efficiently. AI can serve as a key catalyst in this regard.
In practice, forward-thinking investment firms are already using AI in a targeted way to strengthen their buy-and-build strategy. Consider, for example, a company operating in the auto body repair sector.
Each acquired location brings its own systems, processes, and pricing agreements. With AI, companies can consolidate data more quickly, standardize damage estimates, and centrally optimize planning and procurement. As a result, they integrate new acquisitions more quickly and roll out best practices immediately across the entire group.
Buy-and-build thus becomes more than just merging companies; it creates a single, more efficient, and scalable organization. In this example, this approach contributes to over 20% additional annual revenue growth and a comparable improvement in EBITDA.
Private equity is changing
Managers who successfully combine strategy, technology, and execution capabilities can make a difference in this new phase. That is why we focus specifically on their ability to create value within companies.
Private equity is changing. Indeed, the ability to continually adapt has always been one of the sector’s strengths.
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