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How to Achieve
As an executive in the private equity (PE) industry, you are likely to be working with consulting partners on an ongoing basis. You’ll be happy to know, then, that we have a global network of MetaExperts™ who are operational excellence experts specializing in your industry. In a time when exits are down but still robust, and fund-raising is good yet good deals are hard to find and close, you are challenged to:
- Find buyouts with low capital loss rates and high medium-deal returns,
- Acknowledge the high-price culture and adapt to it,
- Determine the best way to invest in countries with economic challenges such as what Western Europe grapples with post Brexit,
- Put more effort into finding good deals while closing less of them,
- Make operational (not just financial) due diligence a top priority,
- Become a data mining expert,
- Anticipate disruptions that can change a company’s value overnight,
- Define and design new models for value creation and risk management, and
- Generally assume more risk.
Our MetaExperts™ are masters of applying operational excellence to these challenges and helping you dial in highly targeted returns rapidly.
What big obstacles to effectively investing or achieving the growth yield expected exist in the Private Equity Industry
and how can they be resolved?
The strength of Private Equity professionals for the most part is that they can readily financially re-engineer a company. As a result, there is a tendency for people to rely on what they understand and are good at to achieve goals. There are some firms that have operating groups who focus on operational improvements such as pricing. But, rarely do the PE firms perform a deep dive into the type of work MetaOps does. MetaOps executives bring a wider perspective to an assignment permitting clients to amplify and maximize operations. Some examples:
- Leveraging advanced technology to supercharge operational improvements as well as get closer to customers through personalization and data management.
- Bringing in outside experts for expertise whether to identify emerging opportunities, source deals, and/or provide know-how on challenges, partnerships, etc.
- Utilizing an advisory board to bring in diverse perspectives, guide the portfolio company, plus push management and investors outside intellectual comfort zones.
— MetaExpert JoAnn Laing
Profiling, Screening and Target Planning for Generating Deals
The PE industry has almost tripled in size of the last decade leaving the middle market (905 of PE) in tough competition. As a result, finding and generating ‘the deal’ is the primary name of the game. All consultants to the PE industry practice industry profiling and company screening when determining what opportunities should be targeted and where the best deals can be found. MetaExperts™ bring a new and disruptor-level dimension to this practice because they are first and foremost practitioners of OpEx and secondarily highly specialized all-things-PE experts.
OpEx in profiling, screening and target planning brings these competitive differentiating assets to bear:
- Unsurpassable process excellence,
- Leadership superiority for performance management,
- Deep experience in deploying strategy not just designing it, and
- Development and delivery of highest-performing teams for deal execution and continuous value improvement.
Post-acquisition Returns Strategy for Effective Management and Rapid Returns
MetaExperts™ aren’t finished once the deal has been acquired, in fact, they’ve just begin to make it really count. Through their leadership in PE acquisition, they infuse rapid- and excellent-return capability with:
- Risk management and compliance tactics,
- Growth and compliance strategy and deployment,
- Optimal organizational development and capability transfer, and
- Revenue return optimization through best practices maximization.
A MetaExperts™ charter is to aim high and deliver higher.
Assessing Performance Opportunities through Cross-division Due Diligence
MetaExperts™ approach every aspect of the PE industry’s success with this in mind… In the industry:
“There is way too much attention given to just financial performance when analyzing existing and new investments. Not enough attention is paid to the actual company operations and its key personnel. Value investors such as Warren Buffet have said for years that choosing the best management is key to future performance.
Most investment analysts are MBAs or CFAs who have little real-world experience in the workplace and understanding what an exceptional company’s operations look like. Our belief is that the investment analysis industry could use a partnership with operational experts to produce a more textured analysis. For Example, for a new company to create an Initial Public Offering requires close to a million dollars before an underwriter brings a new issue to market. Private equity and alternative investment firms could use (and justify) an operational audit of operations and staff as an integral part of due diligence and the expertise that MetaExperts™ provides is a natural match with this concept.”
Creating Revenue while Reducing Cost through Ongoing Value Support
Creating value and reducing expense is intrinsic to every action a MetaExpert™ takes or advocates. Because all his or her practices are deeply rooted in operational excellence, these components of OpEx are deeply rooted in value creation:
- Visualizing key operational processes and how they impact value positively and negatively (the acting accordingly),
- Aligning process and workflows with resources for maximum value and minimal waste,
- Enabling metrics-based behaviors, processes and systems,
- Executing all actions functionally while deploying operations systematically,
- Relentlessly driving continuous improvement.
Maximizing Fund Returns via Exit Support
A PE exit strategy and deployment is as critical to investment value as acquisition excellence. While most consultants to the PE industry (note that MetaExperts™ is not a consulting firm but does serve the same role with extensive added value) put operational excellence on the list of post-acquisition good-to-haves, we infuse the exit strategy and process with it. An effective and profitable exit can always be ensured by a culture of operational excellence including:
Strategic clarity,
Superbly architected processes, and
A well orchestrated system of execution.
OpEx practitioners — subject matter experts — front-end load every step of the transition with these characteristics and their intrinsic change management capabilities.
The OpEx Answer for Continual Improvement Strategy
It’s not over until it’s over is a consistent mantra of OpEx professionals. Consequently, they commit to continuous improvement strategy and deployment through every step of a PE deal that will benefit from it. Every critical phase, process and system that reduces risk and increases value is scrutinized and improved continually through a process of:
- Measure
- Report
- Analyze
- Test, and
The continuous improvement process typically yields higher returns with less costs that PEs are accustomed to.
