Best of LinkedIn: Private Equity: Value Creation CW 44/45 2026

Private equity returns are now earned through operating performance rather than leverage and multiple expansion, and AI has become the arena where that shift is tested most visibly. Exits recovered in the third quarter, yet the backlog of aging assets and the steep rise in required EBITDA growth leave sponsors dependent on execution. The firms pulling ahead are underwriting AI at close, aligning sponsors and management early, and building operating benches that can deliver the plan.

Date

November 10, 2026

Private Equity: Value Creation

Thomas Allgeyer

Methodology: Every two weeks we collect most relevant posts on LinkedIn for selected topics and create an overall summary only based on these posts. If you´re interested in the single posts behind, you can find them here: https://linktr.ee/thomasallgeyer. Have a great read!

Listen to our podcast

If you prefer listening, check out our podcast summarizing the most relevant insights from Private Equity: Value Creation

‍

AI underwriting and valuation

One firm underwrote AI as the deal thesis, planned EBITDA dips in years one and two, and funded implementation at close
McKinsey data on 471 PE-backed companies: 13x median revenue multiple for AI experimenters, 20x when AI is part of the customer offer, 31x for new AI-driven businesses
McKinsey's message to portfolio CEOs: demand AI P&L impact within six months, not isolated pilots
Attributable returns remain unproven: manufacturing production use of AI sits under 3% (OECD)

‍

AI execution in portfolio companies

Execution is the gap: only 13% of 958 tech leaders say nearly all AI initiatives scale (Riviera Partners)
65% of firms have realised less than half the value of their plans, though 58% now deploy resources in the first 100 days, up from 29% (Alvarez & Marsal)
AI value creation is splitting into efficiency work, managed on unit cost, and growth work, built for revenue
83% of PE tech and AI operating partners have an AI agent live in portfolio finance, led by covenant monitoring at 58% (Accordion)

‍

CFO and operating partner alignment

Sponsors and CEOs often want different CFOs, and one joint kickoff call on year one outcomes prevents failed searches
Most sponsors see CFO underperformance, and longer holds favor operator-minded CFOs
Finance is the most requested operating partner function this year (Lancor)

‍

CEOs, boards and talent

Shrinking CEO tenure is the real challenge, and boards often withhold the authority CEOs need
Silence after close drives top talent to quietly job hunt
Unresolved stakeholder decisions, not weak strategy, delay EBITDA initiatives
PE's move into legal will intensify the talent war in 2027, with management services organizations hiring executives from outside the sector

‍

What drives returns now

Margin improvement drove 51% of EBITDA growth for 2025 exits, more than double the pre-2023 share (Alvarez & Marsal)
Bain: "12 is the new 5", as the EBITDA growth needed for the same returns has more than doubled
US mid-market deals priced at 9.6x EBITDA versus 16.0x for large-caps, with top quartile IRR of 24% versus 19.5%

‍

Exit and market conditions

16,000 portfolio companies are held beyond four years, 52% of buyout inventory, and Q3 was the best exit quarter since 2021 (McKinsey)
European deal value fell almost 11% from Q2 to Q3 and exit value fell by a quarter (PitchBook)
European cyber deals grew more than twice as fast as in the Americas since 2023, at roughly 30% lower entry valuations

‍

AI-led platforms and roll-ups

Long Lake's $6.3 billion acquisition of American Express Global Business Travel tests the buy, transform with AI, compound model
Hg backed a venture embedding forward deployed engineers in European businesses, building on Claude
Blackstone-backed Champions Group entered the Southeast with its Bardi acquisition in Metro Atlanta
PE is seeding platforms in India's medical devices, with Romsons and KKR-owned Healthium reported to be pursuing BL Lifesciences

‍

Scrutiny, integration and new offers

essentiq, owned by Rhein Invest, took over MSR Consulting Group to pair customer data with consulting
Gryphon's ophthalmology platform Vision Innovation Partners faces scrutiny over debt and patient safety
New offers: a Denison Nunn whitepaper on ten PE AI transformations, the Teragonia platform and the PEO Alignment Score

‍

Thanks to Kate Brogden, Francisco Lara, Asif Rahman, Jon Lensing, Cabot Earle, Ross Kinnaird, Dion Rooney, Ali Azzam, Matthew Snazel, Carla Bourque, Kevin McLaughlin, Adam Coffey, Dan Cremons, Aashiesh Chopra, Asutosh Padhi, Lee McCabe, Barry Toren, Jennifer G. Bates, James O'Dowd, Timo Gunia, David Gray Barnette, Pari Natarajan, Will Schryver, Jack Denison, Thomas Thayyil Thomas, Christopher J. Conti, Farouk Hussein, Rodney Steele, Mirjam Martin, Sebastian Esser, Jimmy Bijlani, Sam Shahneh, Jack Gage, Paul Press, Sean Mooney, Alex Edlich, Danny Van D'huynslager, Mario Peshev, John Colelli, Elizabeth C., Olivier Marret, Dr. Marc P. Bielitza, Emily A. Chien, Nikhil Zaveri and everyone else who contributed insights to this edition.

Find the full list of posts and voices on LinkedIn:

Subscribe to newsletter

Subscribe to receive the latest blog posts to your inbox every week.

Thank you! Your submission has been received!

Oops! Something went wrong while submitting the form.

Frequently asked questions

How is AI changing private equity valuations?

AI is now part of the deal thesis. McKinsey data on 471 PE-backed companies shows a 13x median revenue multiple for AI experimenters, 20x when AI is part of the customer offer and 31x for new AI-driven businesses. One firm even planned EBITDA dips in years one and two and funded implementation at close.

Why do so many AI value creation plans fall short in portfolio companies?

Execution is the gap. Only 13% of 958 tech leaders say nearly all AI initiatives scale, and 65% of firms have realised less than half the value of their plans. More sponsors now act early: 58% deploy resources in the first 100 days, up from 29%.

What drives private equity returns now?

Operating performance rather than leverage. Margin improvement drove 51% of EBITDA growth for 2025 exits, more than double the pre-2023 share, and Bain says the EBITDA growth needed for the same returns has more than doubled. That puts CFOs, operating partners and aligned management teams at the center.

Results that speak

How we solve real problems for real clients

No items found.

See more Cases