A great new book recently hit the shelves by Jason Scharfman. While the topic is operations due diligence – this is the first book of its kind to get beyond financial due diligence into the risk in the operations of the business. What is uncovered in due diligence gives the eventual buyers an edge assuming operational value creation is in their arsenal beyond selecting good management and holding them accountable with proper incentives.
The book itself addresses many topics that cross over to value creation and portfolio management including:
– difference between operational due diligence and ongoing portfolio management needs
– using operational data in deal negotiations and ongoing operations
– creating ongoing monitoring of operations as part of board governance
– leveraging generalist and specialist operational advisors
While the book caters somewhat to both GPs and LPs, it sets the stage to provide a framework on how DD and ongoing value creation should be discussed in the industry.
James Grebey’s Operations Due Diligence is out almost at the same time. The book has a very similar holistic treatment of the various aspects of Ops DD including sales, personnel, financial, manufacturing, IT etc. There is limited discussion of using the findings in ongoing operation so slightly less relevant for our topic.
When it comes to value creation itself, very few titles are emerging since Orit Gadiesh’s broad review of the impact PE firms make.
What is this blog?
These are some of our insights along our value creation journey in private equity.
Instigator: Tamas Hevizi
- Value Creation 2.0 – The Quest for a Better PE Alpha
- Persistent Trends in Value Creation
- Macro Trends and PE Value Creation
- Why Can’t Management Outperform PE?
- Will China Transform Operational Value Creation?
- Green is the Color of Money
- Any Operating Model Could Work
- PE Group Purchasing makes Headlines
- Awards for PE Operational Excellence
- Great Books in Value Creation