1、Value creation in private equityKPMG.Make the Difference.From stock-pickers to the quant PE houseTransforming PE value creation:Five capabilities for achieving operational alphaContentsImplementation roadmapExecutive summaryThe state of private equityImplicationsConclusion041807291631 2025 Copyright

2、 owned by one or more of the KPMG International entities.KPMG International entities provide no services to clients.All rights reserved.2Value creation in private equityPrivate equity(PE)has traditionally relied on picking the right investment to release value through business transformation post-de

3、al.PE returns have traditionally had a component of financial leverage,multiple arbitrage and value creation usually considering a combination of all these factors whilst surfing a wave of low interest rates and natural market expansion.As those factors seem to evolve and fade base rates have normal

4、ized,dry powder tops US$1.0tn,and there is more than US$3.0tn backlog of unsold assets in the exit pipeline it becomes clear that the industry will need to evolve into looking for more sophisticated ways of creating tangible value in ever increasingly disputed markets.In this sector,data is power.He

5、dge funds turned quants a decade ago.Public-market active managers quickly followed with factor signals and alternative data.Yet most buy-out houses still prefer to trust a more traditional approach towards value creation,based on expert judgment and financial analysis.We believe that as market tail

6、winds fade,operational alpha built on stochastic modelling,outside-in signals and predictive intervention will become a real source of competitive advantage and a systemic and repeatable investment edge.We believe that the next decade belongs to houses that can manufacture operational alpha systemat