Six Disciplines of Private Equity Any Corporation Can Use

Summary

Private equity holds several inherent advantages over public ownership, including the ability to boost equity returns through creative leverage structures. Yet it is more than financial engineering that explains the difference in returns between private equity and the public sector. Rather, the key reason for the success of the private equity model is its unique ability to add value to a business through a singular focus on maximizing shareholder returns.

The managerial discipline and strong operational performance that is typical of private equity holds lessons for all organizations—large or small, domestic or multinational, manufacturing or service—in virtually any sector of the economy. In this new Executive Insights, Peter McKelvey identifies six specific disciplines from the private equity world that can be employed by any senior management team to improve performance.