The Private Equity Value Creation Report: 2025
What separates the best private equity deals from the rest? Which sectors consistently outperform, and why? How has value creation changed over the years?
These are just some of the questions that led us to analyze data from over 10,000 private equity investments globally for our latest “Private Equity Value Creation” report. Here's a summary of our key findings:
Revenue growth is the largest driver of PE value creation, contributing on average 54% of value creation. Multiple expansion contributes significantly at 32%, while margin expansion plays a smaller role at 14%. Given the recent downward pressure on multiples, revenue growth has become an even more critical driver of success.
Buy-and-build is central to PE value creation. Companies with a more active buy-and-build strategy deliver higher returns across all performance quartiles. When done right, buy-and-build bolsters all three value creation drivers: revenue growth, margin expansion, and multiple expansion.
Companies with higher revenue growth rates generate significantly higher investment returns. Growth amplifies other value drivers as well, particularly exit multiples. Fast-growing companies typically command 30-50% higher multiples at exit.
