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Private equity firms strive to build value creation models that work for them

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Emerging value creation modelsPrivate equity firms of all sizes are building value-creation models at a time when it’s harder to generate the outsized returns limited partner investors have come to expect. Yet just as firms are not one-size-fits-all, neither is how they create value at the portfolio level. Megafirms like the Carlyle Group and KKR & Co. have had tremendous success with a multi-pronged approach and a captive consulting arm. Other firms use an in-house or a consultant model to create value. Ultimately it’s clear that all strong private equity firms strive to achieve a balance in their processes while emulating the big players’ models on a scale that works for them. What’s also clear is no two processes are the same, and all models can be successful.  

In this article, Grant Thornton talks to executives at a variety of firms to hear what works for them and why. We also offer our own perspective on how middle markets are responding to pressure to maximize returns. The bottom line is to formulate the best plan, with the right process, to achieve ideal results for investors.