We talked to Casper about his view on value creation within private equity owned companies.
- So what are the major challenges facing Nordic PE firms currently? “Increasing competition leads to higher transaction multiples which translates to higher expectations on the development of the companies. In essence, this boils down to the ability to execute. Making the correct analysis, understanding what is going on in the market and making a strategic plan to capture opportunities is something that PE funds tend to be very good at. The big challenge however tends to be executing the strategy as planned and this task comes down to the management of the portfolio company. Companies owned by PE funds also tend to be in a phase of rapid growth and transformation which makes execution complex.”
- So what should PE firms focus on? “From our experience, the key to successful execution lies in the preparation, support set-up and assignment of clear responsibilities. PE funds need to support their portfolio companies in setting up lean and value focused strategy implementation programs. On top of running the business as usual, management will also drive a range of new initiatives and will require relevant support to be successful. Management consequently need to be given the pre-requisites to succeed yet at the same time retain a very clear ownership of strategy execution to avoid any confusion.”
- How do you assist clients with these issues? “We support PE funds across the entire deal cycle, and have deep experience from supporting portfolio companies in achieving their strategic ambitions. We can support PE funds in helping their management teams establish, review or re-ignite execution efforts to deliver tangible business value and bottom line impact. Since our consultants have experience from both M&A, corporate strategy and execution, we understand both the owner’s perspective as well as the operational issues faced by management. Management has a challenging task of both running the firm on day to day basis while simultaneously drive major new initiatives and this is where we can come in and give targeted support.”