Digital Potential in Private Equity at Portfolio Level

Portfolio Level

In a previous post, we looked at Digital Potential in Private Equity at a Fund Level. However, it’s at a portfolio level that we are seeing PE companies really embrace digital transformation at every stage of the investment life cycle.

Digital transformation is emerging as a critical strategy to accelerating top-line growth post-acquisition and unlocking hidden value across the portfolio. Twenty-three percent of survey respondents are currently employing digital transformation as a value creation strategy, and forty-five percent of survey respondents say they are intentionally building digitization into their value creation plans.

BDO tenth annual private equity perspective survey

This move to digital cloud platforms allows a huge opportunity to improve portfolio efficiency. Companies link portfolio company systems together for monitoring purposes.

Data analytics is starting to be used at a portfolio level. Business Intelligence tools can uncover workplace inefficiencies, speed up work flow process and give cost transparency. If there are multiple similar companies within the portfolio, information garnered from one, can be used to enhance the other.

Integrating add-on companies is the top strategy employed by PE firms to boost the value of their portfolio companies, cited by over half of private equity firms that were surveyed. And while traditional cost-cutting and operational measures aren’t going anywhere, digital transformation is emerging as a critical strategy to accelerating top-line growth post-acquisition and unlocking hidden value across the portfolio.

If you have found this blog post useful you may like to read our related articles below, or take a look at the Alternative Investment page to find out more about the work TiG Data Intelligence does in this specialist sector.

Tom Riley

Author: Tom Riley – Alternative Investment specialist at TiG Data Analytics

Enabling specialist UK businesses to unleash their true potential.

Get in touch