Private Equity investments are at a record high. The industry has charted a gradual recovery post-2008 aided by diversifying investment focus and participation in emerging markets. However, investments have not kept pace, and approximately 23 percent of committed capital remains uninvested; this has impacted the overall returns for the PE industry. High potential portfolio firms are being weighed down by high SG&A expenses that are making a negative impact on valuations. In addition, many firms have critical mass issues inhibiting IT optimization and lack the expertise necessary for technology innovation to be both widely adopted and cost efficient. Without the correct tools, processes, and systems in place, high-cost structures will continue to diminish valuations and returns.
Our experts believe technology optimization can drive additional efficiencies and create a competitive differentiator for PE portfolios. Avasant utilizes strategic sourcing and transformational strategies to reduce organizational cost and drive revenue opportunities. As such, our clients consistently realize enhanced valuations through higher net profits and growth rates. Technology-driven solutions can have a positive impact on valuations and drive multiples. Our strategic transformation approach and execution support provides our clients with a unique method to unlock value, improving bottom line, and freeing up capital for investment in growth.
Client Case Study
Realizing investment potential requires reimagining your business model. Young companies are focused on exponential growth, yet they often lack the capability to optimize business and technology processes that drastically limit their ability to invest and evolve. Our client was looking to evaluate its early and growth stage investment portfolios and to reduce costs. We analyzed best practice technology spend rates to identify savings and connect our client with best of breed service providers who could provide these same functions at a parity. Our efforts resulted in a sizeable decrease in support costs and increased valuations, enabling the firm to experience growth with a broadened perspective.