Implementing Lean or Six Sigma Methodologies

Post-acquisition value creation is a critical component of the private equity (PE) investment process. While acquiring an SME at an attractive price is essential, it is what happens after the acquisition that often determines the success of the investment. Private equity investors employ various strategies to enhance the value of their portfolio companies, ultimately leading to higher returns at the time of exit. For SMEs, these strategies can range from operational restructuring and revenue growth initiatives to strategic acquisitions and talent optimization. Excellence at this post acquisition integration, improvement and operation is critical to fund returns – “analysis of more than 100 PE funds with vintages after 2020 indicates that general partners that focus on creating value through asset operations achieve a higher internal rate of return—up to two to three percentage points higher, on average—compared with peers.” Source: McKinsley 2020, Bridging Private Equity’s Value Creation Gap. Read more.