Private Equity 4.0: Reinventing Value Creation

5 The main characters in private equity

Executive summary

The macro perspective adopted so far fails to capture the incredible diversity of managers within private equity. The industry is anything but a homogeneous grouping, and will become even less so as it moves towards a greater level of maturity. A multitude of specialized fund managers have developed, not only in terms of organization, but also in terms of size, geographical reach, strategic focus and modus operandi. Darwin would have been proud of the evolutionary zeal of some of the sharpest minds in finance and investment…

The term private equity itself encompasses a rich variety of transactions, from seed investments of $10,000+ to $30 billion-plus leveraged buyouts. Traditional definitions and typologies of the private equity market are still helpful, but fail to reflect the latest evolutions and specializations in this complex market. In particular, private equity firms have developed idiosyncratic approaches to deal sourcing, generating post-investment value and engineering exits. Employing armies of management consultants, industry veterans and assorted advisors, they continuously seek to develop new edges to achieve superior performance. In this chapter, we employ different perspectives to segment the private equity world and attempt to reveal its amazing variety and specialization today. We investigate firm ...