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Over the past two years, a few clear trends have emerged across the private equity landscape.
First, sponsors are front-loading value creation activities—both in identifying opportunities and driving early implementation of potential changes. The goal: accelerate impact early in the hold period to maximize value, limit late-stage surprises, and position well for expeditious exit opportunities.
Second, there's a renewed focus on performance visibility, specifically related to liquidity and working capital. Sponsors are investing in people, processes, and technology to strengthen FP&A capabilities and improve real-time decision-making.
Finally, we're seeing an increasing number of sponsors building formal operating capabilities internally to better support the aforementioned efforts across their portfolios. While these functions have traditionally been more common in bulge bracket funds, the concept is quickly expanding across middle market funds as well.
In a market defined by unwavering enterprise value expectations—despite macro headwinds—these trends reflect a broader need for organic growth amid lower deal volumes.
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