For private equity investors, success hinges on turbocharging portfolio value creation. BCG’s portfolio consulting teams help investors craft high-yield, effective portfolio management strategies that improve portfolio companies’ top and bottom lines.
Private equity firms have long used three approaches to portfolio management to boost investment returns and portfolio value creation: leverage, multiple, and operations. Today, the most effective portfolio management actions center on enhancing performance in operations. BCG’s unique service offering—our full-potential plan approach—helps investors meet this imperative.
Each plan that we develop for our private equity clients activates multiple levers—with an emphasis on leaving no stone unturned. BCG’s full-potential plan approach to portfolio company management comprises eight steps:
Operational excellence, in such areas as manufacturing, fixed product costs, and logistics
Selling, general, and administrative expenses, including increasing efficiency of R&D and sales and reducing cost in general and administrative expenses and procurement
Organization and processes, for example improving governance and such processes as human resources, finance, and IT
Finance management excellence, by optimizing capital expenditures and working capital, as well as improving short-term liquidity forecasts
M&A, including mergers, add-on acquisitions, new ventures, and divestments
Disruptive changes, such as building innovative business models and launching digital transformation programs
Environmental, social, and governance (ESG) factors, by incorporating them across investment portfolios
As our portfolio consulting experts build portfolio acceleration plans for clients, we work with the exit always in mind. We determine how to maximize portfolio value creation during the holding period in order to command the highest sale price, with a focus on producing the greatest and fastest impact on performance for optimal portfolio company management.
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.
Far from being up on the blocks, the automotive sector has massive untapped potential. Investors that lock in their strategy now could tap into billions of dollars in value.
For sovereign wealth funds and pension plans, fostering a portfolio of innovative new ventures is a powerful opportunity. You might even create your own unicorn along the way.
Brands have a powerful opportunity to increase the bottom line in an uncertain economic environment. Here’s how consumer packaged goods leaders can improve price realization.
BCG’s portfolio consulting team includes experts with a strong track record in portfolio operations, private equity, and portfolio company management. The team is backed by, and partners with, a network of more than 1,000 experts across industries in order to help clients deploy potent new approaches to portfolio management.
