private equity at work: companies
TRANSCRIPT
How Private Equity Builds Businesses Who Benefits?
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Private equity invests in bricks and mortar, employees and management
teams, and entrepreneurs and ideas.
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At its core, private equity is about strengthening companies, making them more competitive and creating value.
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Have significant potential for growth.
Are not living up to their full potential.
Are struggling and badly in need of repair.
Private equity and growth capital firms invest in and often acquire companies (referred to as portfolio companies) that…
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The Investment Model
Private equity firms invest capital, as well as time, energy, expertise and talent to improve company performance.
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Growing Companies
“Industries where private equity funds have invested in the past five years have
grown more quickly in terms of productivity and employment.”
- S. Bernstein, J. Lerner, M. Sørensen and P. Strömberg
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Creating Value
The proportion of private equity returns that is driven by strategic and operational improvements.
36%
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Private equity-backed companies increase their net earnings through:
Organic revenue growth (responsible for over 40% of gains)
Cost reductions(responsible for 25% of gains)
Acquisitions(responsible for 25% of gains)
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Increasing Competitiveness
Productivity growth at private equity-backed companies surpass non-private equity-backed companies by two percentage points.
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Driving Innovation
Private equity-owned companies pursue more economically important innovations than non-private equity-owned companies, as measured by patent citations.
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Private Equity in Practice
Christopher Nassetta, President and CEO of Hilton Worldwide on working with private equity.
“From the standpoint of our business, being owned by [private equity is] the best thing that ever happened to Hilton. Hilton was a good company that had the potential to be a great company and [private equity] has unleashed the ability for us to do that.”
Visit www.PrivateEquityAtWork.org to find out more about the private equity industry.
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