The Role of Management Expertise in Private Equity

Private equity-backed companies don’t just benefit from the capital injection provided by private equity, but also gain from the management and operational expertise that PE firms bring to a partnership. This plays into the initial planning and capital investment, as well as the management phase of a partnership.

A commonplace practice is to employ a 100-day plan at the beginning of an investment, created collaboratively by private equity managers and leadership teams at the companies in which they invest. A recent, 100-day plans cover a range of strategic issues, including operational, administrative, financial reporting issues, and more.

Private equity’s management expertise can be highlighted through collaboration and identifying opportunity throughout a partnership, as well. We saw this highlighted in the Carlyle Group’s investment in AxleTech, as well. Working with Carlyle during its ownership, CEO Mary Petrovich led AxleTech’s foray into the fast-growing military sector, targeting its heavy-duty axle and suspension systems toward military vehicle manufacturers building heavy armored vehicles for American soldiers in Iraq and Afghanistan. “I’m very passionate about private equity,” says Petrovich, “because it’s not only made a difference in my life; it’s made a difference in the lives of 1,000 other employees of AxleTech’s.”

See the AxleTech video case study below, and click here for more examples of how companies across America benefit from private equity investment.