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Laxman Pai, Opalesque Asia: Private equity (PE) funds are looking for new, creative value creation opportunities in light of the tougher market conditions, said a study.
According to the survey of nearly 200 PE investors by Alvarez & Marsal, almost two-thirds (63%) are looking for new routes to value creation.
In addition, one-third (33%) say they are extending value creation plans as exits prove more difficult in a challenging environment, it said.
Despite subdued dealmaking activity, PE investors still favor acquisitive strategies, with just a quarter (25%) choosing organic growth over M&A.
According to the survey, PE firms are also instilling a heightened sense of urgency to value creation activities. According to the survey, 74% of PE executives prefer to launch their value creation program either immediately following the acquisition or in the first three to six months after the transaction.
The data also indicates that digital transformation is becoming increasingly important. The vast majority (84%) of respondents see digital infrastructure as critical for successful transformation projects, with half (49%) considering it from the very start of the value creation program - a figure which has risen by 12% since 2022.
Automation, in particular, seems to be a focus for investors, with 43% looking to identify areas where technology can help to further automate the business.
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