Private equity is staring at a real distribution drought — but progress inside the business is available now.
Capital returned to investors fell to roughly 9% of net asset value in H1 2024, down from ~29% in 2021. At the same time, firms are sitting on an estimated ~30,000 unsold companies worth ~$3.6 trillion. That math stretches hold periods, cools fundraising, and raises the bar for what “performance” means. When you can’t sell at the price you want, you have to show value through operating results buyers will underwrite when the window opens.
A simple way to move faster: Focus → Fund → Scale
Focus the team on the few moves that change the math quickly. Translate strategy into 3 to 5 priorities, clean up roles and handoffs, and impact the first KPIs that prove traction.
Fund the future by unlocking cash and profitability. Tighten pricing and mix where value is clear. Build procurement muscle. Improve cash conversion, especially the order-to-cash steps that slow billing and collection. Decide, explicitly, what gets reinvested and what drops to the bottom line.
Scale the execution so gains compound. Standardize the processes that worked, add lightweight automation, and set a leadership cadence that keeps improvements in place after the quarter ends — enough structure to prevent backsliding without diluting EBITDA with too much investment.
How this shows up in the real world
Two very different companies — one in professional services, one in construction services — came to us with the same underlying problem: outcomes weren’t keeping pace with expectations, and time wasn’t their friend.
We started the same way in both: clarify what matters. In professional services, that meant naming a few growth lanes with the highest probability of return and reshaping the organization so the work could flow. In construction services, it meant getting specific about the blockers to margin — procurement fragmentation, slow cash collection, and decision bottlenecks on projects.
Then we funded the plan from inside the business. The services company shifted delivery to a global team, lowering unit costs without denting quality, and tightened how deals were priced and approved. The construction firm built a real procurement capability and renegotiated supplier relationships; cash collection became a priority with the people and process to match. Finally, we made the improvements stick with simple operating rhythms, dashboards people actually used, and process standards that kept old habits from creeping back.
The professional-services business increased EBITDA by ~50% in 12 months. The construction-services business moved from $0 to $10M+ of EBITDA in 30 months. Different sectors, different levers, same approach: Focus, Fund, Scale.
What this signals to sponsors and buyers
- Underwritable performance — every move tied to measurable KPIs and a plain-English value bridge (change in EBITDA × exit multiple).
- Faster credibility — a 90-day proof of cash impact that sets up a 12–30 month structural lift.
- Alignment that matters — collaboration with your operators; economics that share the upside.
In a market where exits take longer, companies that demonstrate operating momentum — pricing discipline, cost position, cash conversion, and predictable delivery — win attention and better multiples when the window opens. The backlog won’t clear overnight, but progress inside the business is available now.
