Data analytics, ESG, and take-privates will all feature heavily as private equity firms seek to create value in the years ahead, say KPMG’s Glenn Mincey and Carole Streicher in an interview with Private Equity International magazine. Mincey and Streicher also note that, in the current economic environment, and with fewer platform deals on the horizon, firms must shift their energy to look at opportunities to deliver more EBITDA improvements thoughtfully and quickly within their existing portfolios.
Following are other key points raised in the interview:
- With the potential slowdown in deal volume, expect longer hold periods, which will require owners to closely focus on medium- and longer-term growth strategies and optimization.
- Private equity firms are doubling down on their data and analytics capabilities to drive deeper insights and support value creation and performance improvement.
- Facing headwinds around higher interest rates and lending restrictions, private equity firms are actively looking for additional levers they can apply, which means value creation and ESG are key considerations right now.
- Once a red flag risk management exercise, ESG is now a focus at all stages of the deal process and is seen as a means of creating value. Equally critical is the need for quantitative data on climate risks and opportunities, as well as a uniform standard.
- As we look ahead to 2023, we will likely be in a scenario that is more robust for take-privates.
The next year is going to require much greater focus on analytics to understand which levers are best positioned to create value within their portfolio companies.
—Carole Streicher, Deal and Strategy leader, KPMG U.S., and Americas Regional Head of Deal Advisory
There is a clear belief that sustainable companies are more stable companies, and consumers in all industries seek out strong ESG criteria.
—Glenn Mincey, Global and U.S. Head of Private Equity, KPMG
