Value Creation – CEPRES Proves Private Equity Gets It Right
CEPRES today released a unique analysis that demonstrates Private Equity is enhancing value in operating companies. By analyzing thousands of PE-backed Operating Companies, CEPRES found that since the Global Financial Crisis (GFC) there has been a steady and significant increase in Average Compound Annual Growth Rate (CAGR) of EBITDA for PE-backed Companies. Further, CEPRES found that increase in valuation of companies post GFC is driven more by EBITDA Growth than prior years. This evidence supports the view that Activist PE Fund Managers are effective and able to deliver on the promise of delivering returns through Value Creation. CEPRES also found that valuations are currently being driven by increased market pricing – commonly called Multiple Expansion.
- CAGR of EBITDA for PE-backed companies has significantly and steadily increased since the GFC
- EBITDA Growth is now a larger contributing factor to Exit values than pre-GFC
- Exit values are also currently driven by market pricing (Multiple Expansion)
- This is the first empirical evidence of value creation at work in private equity
“There has been significant speculation about the role of private equity managers as activist investors and whether they actually create value. Now, for the first time ever, we have hard evidence for investors (LPs) and fund managers (GPs) to benchmark their investee companies. It is positive to see such a clear trend and to have the ability to measure and compare these results when investing in private equity. There can be variations for different strategies, sectors, etc. and we encourage participants to get in touch for specific samples.” – Dr. Daniel Schmidt – CEO, CEPRES GmbH
PE.Analyzer is an online investment decision platform. It encompasses deep analysis of 38,000 private equity funds, deals and portfolio companies with a total Enterprise Value of $2.6 trillion USD. It is the only platform providing Technical & Fundamental analysis of track records to institutional investors and fund managers to underwrite their decisions and prove their investment strategy.
CEPRES is an innovative FinTech company helping institutional investors invest in Private Equity with the proficiency of Financial Markets. Investors (LPs) and fund managers (GPs) can interact on a single, confidential platform in complete privacy. LPs gain deep market insights, forecast investment outcomes and enhance due diligence to drive better investment returns. GPs can verify their track record, precisely benchmark their deals and find new sources of capital from around the world. 100’s of institutional investors have conducted due diligence on $1.7 trillion of Buyout, Growth, Venture, Private Debt, Infrastructure and Real Estate funds via the CEPRES platform. For further information, visit www.cepres.com.