By Glen Greer, Principal Consultant
Private Equity portfolio managers have always pushed for the optimisation of their holdings through operational efficiencies. As McKinsey noted in 2018, there was a strategic shift towards “acquire, align on strategy and improve operating performance.” (Private equity operating groups and the pursuit of ‘portfolio alpha’ – McKinsey) They note, more recently, in a new world of macroeconomic headwinds, that “managers should use this as an opportunity to redouble their efforts on creating operational improvements in their existing portfolio.” (Bridging private equity’s value creation gap – McKinsey).
What does this look like in practice?
It starts with execution. Building relationships with strategic partners is crucial not only to building a strategy but also to delivering it. VFP Advisory Services is designed to support portfolio managers and by extension CIOs in building and executing strategies that will drive operational efficiency.
We can do that by creating a vision of unifying portfolio companies onto a single technology stack leveraging Salesforce and Certinia, or by helping build a repeatable playbook for onboarding new acquisitions at speed so that KPIs can be delivered faster, with greater consistency and clarity.
To provide more speed during transformation VFP Managed Services can provide hands-on expertise to help crystalise savings sooner. This could be implementation work, launching a new strategic initiative or tackling a growing backlog.
Operational optimisation is a fundamental lever for value creation in today’s macroeconomic world. As portfolio managers seek measurable improvements in cost, speed, and integration, having the right partner is critical.
