A great deal has been written recently about private equity hold periods being longer during the past two to three years than historically. Close to half of the nearly 30,000 PE portfolio companies globally have been held for more than four years. During these longer hold periods, private equity firms have been laser-focused on identifying and driving value creation, according to insights from Eric Schwatrzman at Baker McKenzie. All avenues of value creation are being pursued, from capturing new market and revenue opportunities, optimizing cost structures, geographical expansion, and inorganic growth through M&A. Many private equity firms have added in-house value creation expertise to spearhead these initiatives across their portfolio.

This focus on identifying potential sources of value is evident across all sectors, not only technology. And even as deal volumes return as expected in 2025, the focus on value creation will endure and continue to be a key source of enhancing returns from private equity investments.

sponsors are focusing on creating value in their tech-focused portfolio companies while they wait for the exit environment to improve. They are looking to streamline expenses and drive growth, with a focus on creating upside during what may be an extended holding period while also being able to demonstrate continued upside for the next owner or investor.

https://www.buyoutsinsider.com/driving-value-during-extended-hold-periods/