How Private Equity Can Create Value Through Purpose
The industry holds clear advantages for making the businesses it invests in more environmentally and socially sustainable. Interviews with leading players point to five priorities.
With private capital growing fast, principal investors and private equity firms have new opportunities to make a positive difference in the world and generate unprecedented value. BCG helps them navigate and seize investment opportunities in a rapidly changing world.
Principal investors and private equity firms are enjoying exponential growth even as economic and financial shifts challenge their traditional ways of doing business and of generating value. Most important, when it comes to generating new opportunities, private capital is at the forefront. For instance, investors and firms are strongly positioned to deliver material impact on environmental, social, and governance (ESG) priorities and to create value by accelerating digital transformation.
But seizing such opportunities calls for fresh approaches to making investment decisions. BCG brings a unique set of strengths and expertise to help investors and firms capitalize on opportunities while navigating uncertainties.
Our principal investors and private equity consulting experts work with the world’s largest investment firms, serving eight client segments: private equity, sovereign wealth funds, pension plans, tech capital investors, infrastructure investors and real estate funds, family offices, credit or distressed funds, and hedge funds.
We help investment organizations and funds that deploy capital capture emerging opportunities while meeting a vast spectrum of challenges. To do so, we provide transaction-related services such as due diligence support—from initial deal execution to exit—and portfolio acceleration. We also provide advisory services in topics such as fund strategy, technology, and organization.
With every engagement, we draw on our deep bench of more than 1,000 global industry and functional experts to bring our clients the best teams and advice, across disciplines including digital capabilities, technology, and operational excellence. We thus add value at every step in the investment life cycle.
Through close partnering with leading global investors, we help clients address their most pressing strategic and operational questions on topics ranging from investment strategy to operating models, governance, and people and organization as well as ESG integration through sustainable finance and investing.
In assisting clients, we take analytics to a new level—with a quest for new quantitative insights that’s deeply ingrained in our DNA. Our centers of excellence and our proprietary analytical tools uniquely position us to provide exceptional support for clients.
Since 2014, BCG’s principal investor and private equity consulting teams have completed more than 7,000 projects across a diverse array of industries and geographies. Our teams have generated impressive value for leading principal investors and private equity firms. For example:
BCG helped a European installer and provider of service solutions for electrical engineering projects, plumbing, and HVAC launch operational and pricing improvements. These changes enabled the company to come back from three consecutive years of flat earnings growth and achieve a 25% EBITDA gain.
The private equity owner of a global construction materials company asked BCG to help the company recover after the 2008 financial crisis. BCG analyzed the asset’s strategy, opportunities, and potential and developed a three-year value creation roadmap that boosted sales growth relative to the company’s precrisis trajectory, generating a 100% EBITDA improvement.
BCG helped a leading sovereign wealth fund in the Middle East redefine its firm-wide target operating model, resulting in a more than 30% increase in overall business efficiency.
BCG’s principal investor and private equity consulting experts are thought leaders in the industry. Their publications are packed with up-to-the-minute, insightful analysis; provocative perspectives; and actionable, strategic advice on a wide range of timely topics.
The industry holds clear advantages for making the businesses it invests in more environmentally and socially sustainable. Interviews with leading players point to five priorities.
Traditional projects offer varying returns, depending on an investor’s willingness to embrace risk. But all eyes are on digital.
PE-owned firms are lagging their public counterparts on diversity, equity, and inclusion. This needs to change.
To prepare their funds and portfolio companies for the opportunities and demands that lie ahead, principal investors need to plan in layers and across multiple time horizons.
If the last decade was a golden age for PE, the next one could be more gilded. Funds have the potential to deliver exponential growth—provided firms make the needed strategic and operational changes.