Private equity and value creation

This Brief explores how private equity funds can help companies prosper. It documents a rich set of value-creation strategies followed by PE funds, which help boost investment, employment and sales and deliver returns to investors.

Private equity (PE) remains an underutilised source of funding for firms in the EBRD regions. This EBRD Impact Brief explores how private equity can help companies prosper. It reports on a detailed study of both textual and financial data from more than 170 private equity funds that the EBRD invested in over a period of 25 years.1 The findings show that PE funds follow a rich set of strategies to create value during the life of a deal. These strategies typically increase operational efficiency in the companies they support – boosting investment, employment and sales – even when compared with equally high-growth and profitable companies. The data show that most operational improvements instigated by PE funds persist after the funds have fully exited their investments.