How Private Equity Builds Businesses
Who Benefits?
Slide
Private equity invests in bricks and
mortar, employees and management
teams, and entrepreneurs and ideas.
2
Slide
At its core, private equity
is about strengthening
companies, making them
more competitive and
creating value.
3
Slide
Have significant potential for growth.
4
Are not living up to their full potential.
Are struggling and badly in need...
Slide
The Investment Model
Private equity firms
invest capital, as well as
time, energy, expertise
and talent to improve
c...
Slide
Growing Companies
“Industries where private equity funds
have invested in the past five years have
grown more quickl...
Slide
Creating Value
The proportion of private
equity returns that is driven
by strategic and operational
improvements.
7
...
Slide
Private equity-backed companies increase
their net earnings through:
8
Organic revenue growth
(responsible for over ...
Slide
Increasing Competitiveness
Productivity growth at
private equity-backed
companies surpass
non-private equity-
backed...
Slide
Driving Innovation
Private equity-owned
companies pursue more
economically important
innovations than
non-private eq...
Slide
Private Equity in Practice
Christopher Nassetta, President and CEO of Hilton
Worldwide on working with private equit...
Visit www.PrivateEquityAtWork.org to find out more
about the private equity industry.
Sponsored by
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Private Equity At Work: Companies

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Private Equity At Work: Companies

  1. 1. How Private Equity Builds Businesses Who Benefits?
  2. 2. Slide Private equity invests in bricks and mortar, employees and management teams, and entrepreneurs and ideas. 2
  3. 3. Slide At its core, private equity is about strengthening companies, making them more competitive and creating value. 3
  4. 4. Slide Have significant potential for growth. 4 Are not living up to their full potential. Are struggling and badly in need of repair. Private equity and growth capital firms invest in and often acquire companies (referred to as portfolio companies) that…
  5. 5. Slide The Investment Model Private equity firms invest capital, as well as time, energy, expertise and talent to improve company performance. 5
  6. 6. Slide Growing Companies “Industries where private equity funds have invested in the past five years have grown more quickly in terms of productivity and employment.” 6 - S. Bernstein, J. Lerner, M. Sørensen and P. Strömberg
  7. 7. Slide Creating Value The proportion of private equity returns that is driven by strategic and operational improvements. 7 36%
  8. 8. Slide Private equity-backed companies increase their net earnings through: 8 Organic revenue growth (responsible for over 40% of gains) Cost reductions (responsible for 25% of gains) Acquisitions (responsible for 25% of gains)
  9. 9. Slide Increasing Competitiveness Productivity growth at private equity-backed companies surpass non-private equity- backed companies by two percentage points. 9
  10. 10. Slide Driving Innovation Private equity-owned companies pursue more economically important innovations than non-private equity-owned companies, as measured by patent citations. 10
  11. 11. Slide Private Equity in Practice Christopher Nassetta, President and CEO of Hilton Worldwide on working with private equity. 11 “From the standpoint of our business, being owned by [private equity is] the best thing that ever happened to Hilton. Hilton was a good company that had the potential to be a great company and [private equity] has unleashed the ability for us to do that.”
  12. 12. Visit www.PrivateEquityAtWork.org to find out more about the private equity industry. Sponsored by
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