How Private Equity firms can ensure compounding value creation for software companies
Private equity firms will often tout their strategic patience. Compared with publicly listed companies that often live quarter to quarter, PE’s ownership cycle affords them the time to rebuild and improve companies so they can thrive in the long term, even if the short term looks challenging. Still, no one mistakes this longer-term outlook as the kind that slows the pace at which GPs pursue their investment thesis. Indeed, private equity has made its name by delivering change at speed, often revitalizing underperforming businesses in record time. Yet while speeding up matters, it is only a virtue if it is married with strategy. This statement is true in every sector, but software companies can be especially prone to mistaking a fast pace for progress. Private Equity International discussed the need to underpin speed with strategic direction with Punit Kulkarni, Vice President, Private Equity at Persistent Systems.