X-Factor
Value Creation Blueprint: Uniting Private Equity Sponsors and Management
May 23, 2024
Ben Riefe, Managing Director at Benford Capital Partners, shares his expertise in private equity and lower middle-market investments. He discusses the importance of strategic partnerships with management to create effective value creation plans. Riefe highlights the significance of team dynamics and the role of key initial hires in driving growth. He also uncovers challenges in lower middle market deals, emphasizing robust succession planning and adaptability to align leadership with evolving priorities.
35:00
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Quick takeaways
- Developing a value creation plan (VCP) involves early engagement with management to foster partnership and clarity in objectives prior to acquisition.
- The dynamic nature of a VCP necessitates ongoing review and adaptation to address market changes and ensure alignment with strategic goals.
Deep dives
The Importance of Value Creation Plans
Creating a value creation plan (VCP) is essential for driving growth in private equity investments. This plan distills the key elements of a business strategy into a concise two to three-page document that outlines priorities and goals in major operational areas. The process begins even before a deal is closed, allowing for efficient planning and execution upon acquisition. Engaging with management early in the process fosters a strong partnership while ensuring that everyone understands the defined objectives and expected outcomes.
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