With increasing EV/EBITDA multiples amid a space overflowing with equity capital, successful private equity firms (PEs) are shifting towards a model that emphasizes Value Creation. Some firms have separated this function out analogous to the division between “Business Development” and “Investment Team”, with names of these teams including “Portfolio Management”, “Value” or “Value Creation”, “Portfolio Support” or (as a subsidiary function) “Data Science.”
In the midmarket (<$5B of assets under management), resources are scarcer, so firms are looking to add value inexpensively and creatively. Sapling Financial Consultants Inc. (“Sapling”) assists a number of private equity firms with various aspects of Value Creation on the Finance side. This is one of a series of whitepapers covering how midmarket PEs can Drive Value in portfolio companies through optimization of the Finance function. Read More
