Leadership and the Future of Value Creation: The New PE Imperative

It's time to deliver – the message is loud and clear from both private equity (PE) investors and leaders of PE-owned portfolio companies. In Criticaleye Partner AlixPartners' ninth annual PE Leadership Survey, it's clear that after coming out of a period of unprecedented turmoil, industry executives are focused on achieving enterprise value milestones, meeting top line growth goals and protecting margins.

Key takeaways include:

• 64 percent of PE leaders say meeting value creation milestones is the top challenge portfolio companies face, followed by top-line growth (56 percent) and operational effectiveness/margin management (42 percent)

• PE fund distributions dropped to just 11 percent of net asset values in 2023, the lowest level since 2009. Alongside this, the value of exits fell 26 percent, and median hold times hit a record 6.4 years, indicating increasing pressure on PE firms to deliver returns

• Nearly two in five PE operating partners plan to remove at least one CEO within the next 12 months. Despite this, only 15 percent of PE firms have a formal process for identifying or developing successors, revealing a major leadership gap in the industry