Commercial value can lose momentum in the transition from diligence to ownership, cutting into the time available to deliver growth. Simon-Kucher’s 2026 Private Equity Value Creation Study examines how higher-performing firms build conviction before close and move faster once ownership begins.
Private equity firms increasingly agree that execution deserves the same attention as opportunity identification. In our 2026 study, 82% say the ability to execute commercial value creation is becoming just as important as identifying value opportunities, while 66% say commercial due diligence still spends too much time assessing the market opportunity and too little time testing whether management can actually deliver. The conflict is clear: sponsors recognize the execution challenge, but diligence processes have not fully caught up.
That gap starts to consume value before ownership begins. Longer exit timelines, demanding financing conditions, and pressure on portfolio-company performance have raised the importance of operational value creation, which means commercial diligence needs to do more than establish that growth exists. It needs to build enough conviction around value, timing, and deliverability to inform the investment case and give management a useful head start after close.
Our 2026 Private Equity Value Creation Study, based on 215 private equity executives, points to a consistent pattern among higher-performing firms. They assess commercial upside more systematically, give credible upside more weight in underwriting, and carry implementation thinking further before close. That creates a stronger starting point for the value creation plan (VCP) once ownership begins.
Underwrite commercial growth with greater confidence
The first gap is simply looking for commercial upside consistently enough. Only a quarter of firms include a structured commercial excellence or pricing assessment in more than 75% of their diligences. Higher-performing firms are more than twice as likely to do so: 32% include that assessment in more than three-quarters of diligences, compared with 13% of lower-performing firms.
Once an opportunity is identified, firms are generally comfortable putting numbers around it: 79% often or almost always quantify EBITDA upside during diligence. The more meaningful difference is whether firms carry that quantified upside into the investment case with conviction. Higher-performing firms know this is critical: 45% of high MOIC firms almost always incorporate estimated commercial upside into underwriting or investment committee materials, compared with 26% of lower-performing firms.
That does not mean every attractive growth idea belongs in the underwriting. Sponsors need to test the assumptions that determine whether the upside is credible: how much EBITDA is realistically capturable, over what timeframe, what investment and capabilities are required, and what management capacity is available. Opportunities that cannot clear those tests should be discounted, sequenced or left outside the case until the evidence improves.
Assess commercial upside through an execution lens
What firms test during diligence shows where execution weakens: about 71% of firms assess pricing strategy when they explore commercial growth or pricing in diligence, but only 33% assess pricing implementation. The strategy gets tested far more often than the operating system required to deliver it.
Execution cannot be tested at full depth on day one because access and data improve as the process advances. A more practical approach is to make the questions progressively more specific, so the sponsor learns enough at each stage to decide what deserves deeper work next:
Management presentation: identify the signal. Establish where growth is expected to come from, where commercial leakage or capacity constraints may sit, and which assumptions deserve further testing.
Pre-IOI: test materiality. Before the indication of interest, use available data, customer evidence, and outside-in analysis to determine whether the signal is real, whether it is large enough to affect the investment case, and where the main execution risks may sit.
Post-exclusivity: underwrite value and execution. With deeper access, quantify what is realistically capturable, the resources and capabilities required, the cost and ramp time, and the specific actions that should enter the VCP.
The objective is to increase specificity as access improves rather than waiting for exclusivity to start thinking about implementation. By the end of diligence, the most important commercial initiatives should have a credible value range, a view on what has to change operationally, and a short list of assumptions that management can validate quickly after close.
Bring operating partners into diligence early
Operating partners and value creation specialists can make that execution lens more rigorous, but their involvement is often shallower than the market's rhetoric suggests. Seventy-five percent of respondents agree that operating partners are becoming increasingly engaged during diligence, yet only about one-third report the deepest forms of involvement, such as co-owning underwriting assumptions, co-developing the 100-day plan, or providing investment committee input.
The difference shows up in early activation: operating partners add material speed to impact when meaningfully involved in diligences, including co-owning underwriting assumptions, or co-developing 100-day plans. Among firms where operating partners are very involved in diligence, 44% report activating at least one commercial excellence initiative within six months across more than three-quarters of their portfolio companies. That falls to 22% when operating-partner involvement is limited or absent, roughly a twofold gap.
The role is broader than providing another review layer. Operating partners can challenge whether an opportunity is executable, help translate diligence assumptions into a focused first-wave plan and maintain continuity as the deal team turns to closing. Management still needs to validate the hypotheses and own delivery, but it should be reacting to a well-supported set of priorities rather than starting from a blank page.
Protect the first wave from execution constraints
The strongest reason to do this work early is that commercial initiatives usually fail for execution reasons. Leadership bandwidth constraints are the most frequently cited cause of missing the business case, at 46%, followed closely by a lack of portfolio-company resources or expertise at 45%. By comparison, only 10% cite focusing on the wrong initiatives and 7% cite a poor solution concept.
That creates another tension in how first-wave initiatives are selected. Management bandwidth is used as a prioritization criterion by only 34% of firms, even though it is the most common failure reason; confidence in execution is considered by 35%, compared with 59% that prioritize EBITDA upside. A strong first-wave plan therefore needs to narrow the agenda to the few initiatives that combine meaningful value with a credible owner, sufficient capacity and a realistic path to impact.
Coming to management with a short list of well-vetted priorities builds momentum and protects scarce leadership attention. It also reduces the amount of analysis that must be reconstructed after close, leaving the early ownership period for validation, mobilization, and delivery rather than another round of opportunity sizing.
Start building the VCP before the deal closes
The practical implication is to let the VCP take shape during diligence. Sponsors should identify commercial signals early, test materiality before the IOI, and use post-exclusivity access to underwrite both value and execution for the highest-priority initiatives. Operating partners should be involved deeply enough to challenge those assumptions and help translate them into an actionable first-wave agenda.
That gives management a focused set of hypotheses to pressure-test and own as soon as the deal closes. In a market where execution is becoming as important as identifying the opportunity itself, better diligence creates an implementation head start and gives commercial value more time to build during the hold.
Explore the full findings, benchmarks and implications from Simon-Kucher’s 2026 Private Equity Value Creation Study.
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