As hold periods lengthen and exit expectations rise, private equity sponsors must shift from incremental improvements to generating operational alpha—differentiated returns from fundamentally improving how portfolio companies grow and operate. According to KPMG’s Brett Shisler and Carole Streicher, operational alpha has outpaced leverage and multiple expansion as a primary source of value creation over recent years. Longer PE timelines, complex transactions, and a challenging exit environment are reshaping value creation priorities, with AI further accelerating this transformation.
Sponsors now require deeper operational expertise to drive sustainable, alpha-generating performance beyond financial engineering.
Source: PE International · Summarized by HeadlinesBriefing