Dry Powder: The Private Equity Podcast The Renewed Urgency of Operational Due Diligence
43 snips
Mar 21, 2023 AI Snips
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Multiple Expansion and Returns
- Half of private equity returns over the last decade came from multiple expansion, driven by low interest rates.
- This trend is unlikely to continue, requiring a shift in focus to other value creation levers.
Lagging Margin Improvement
- Margin improvement, typically a strength of private equity, has lagged as a value driver recently.
- Factors include businesses being sold between PE firms, inflation's impact on costs, and siloed operational advice.
Conflicting Advice
- A restaurant chain received conflicting advice from different consultants, leading to smaller, pricier, slower sandwiches.
- This highlights the danger of siloed consulting and the need for integrated advice.