- Chemicals & Materials
- Consumer & Retail
- Energy & Utilities
- Financial Services
- Machinery & Industry
- Technology & Software
- Telecommunications, Internet & Media
- Transport, Logistics & Travel
Private equity companies strive for top returns. In order to realize an internal rate of return (IRR) of greater than 20% p.a. it is essential to generate added value in the portfolio. Financial engineering or cost optimization are useful methods to achieve this. However, these measures are usually insufficient in realizing superior returns.
Market-relevant parameters are the most effective levers to optimize profits. Thus it is even more astonishing that these measures are often neglected in day-to-day business, leaving significant room for improvement.
Buy: Market/Commercial Due Diligence
Evaluate an investment from a market perspective (including assessment of its future potential). The key aspects are:
- Identify and evaluate risks and opportunities of an investment from the perspective of the market, technology, customers, and competitors
- Validate the business plan (top-line development)
Team structure is a key success factor. Consultants with excellent expertise in transaction processes team up with consultants who are experienced in the relevant industry.
Grow: Added-value Strategies
Define and implement clear-cut measures to exploit market-relevant profit potential, e.g.:
- Clear-cut pricing measures (optimize price level, elasticity-based price differentiation, discount optimization, price monitoring)
- Sales force optimization (introduce a systematic sales approach, reorganization of incentive system)
Sell: Vendor Due Diligence
Support the achievement of a good purchasing price by defining and clearly communicating key selling arguments.
- 3i Advent International
- Apax Partners Clayton Dublier & Rice
- Dresdner Kleinwort Gilde Buy Out Partners
- GMT Communications Partner Goldman Sachs
- Granville Baird Hg Capital
- KKR Riverside