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Changing the game
Private equity refines its investment strategy to manage volatility

Times are tough and they’re only getting tougher. For businesses in every sector, today’s economy poses challenges at all tactical and strategic levels. Private equity investors are just as exposed to the current volatility as anyone else and are rapidly changing the way they think and act.

The market conditions of recent years that greatly assisted in providing consistent returns are gone. As access to capital tightens and market growth slows, investors must dig deeper to identify performance enhancement opportunities that drive value creation. Investors who fail to adapt risk getting knocked completely out of the market.

Of course, one investor’s challenge is another’s opportunity. Savvy players are already using volatility to their advantage by redefining their partnerships and seeking out new sources of knowledge.

By leveraging resources capable of answering the questions they have, as well as those they may not have anticipated, private equity firms can begin to identify hidden opportunities to add value, reduce costs and enhance performance — both internally and among their portfolio companies. Greater knowledge drives greater returns, and tomorrow’s competitive advantage will go to organizations that invest up-front in greater due diligence and effective execution.

To help private equity investors better plan the transition to this new market reality, Deloitte has developed Riding the wave of market volatility, a publication that provides insight into what’s driving this evolution and how investors can best position themselves to capitalize on the resulting opportunities.

 Download Riding the wave of market volatility.

 
Are you asking the right questions? 

Just because the market is tumultuous doesn’t mean investors expect any less from the bottom line. High returns are just as important as they’ve always been. That’s why it’s critical to continue asking the right questions:

  • Are you tightening your due diligence activities when approaching a potential investee company?
  • Are you actively adding value from the start of the investment lifecycle?
    If so, how is value being measured?
  • Is your deal thesis a solid basis of ongoing measurement and reporting activities?
  • Do you use 100-day plans to guide post-acquisition activities?
  • Have you engaged in scenario planning to prioritize performance enhancement initiatives?
  • Does transition planning factor into your acquisition strategy?
Attachments
Riding the wave of market volatility (746 KB)
Opportunity and value for Canadian private equity (24 pages)

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Source: Deloitte & Touche LLP - Canada (English)

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