The time-honored skill of negotiation has undergone significant transformation within the corporate arena, particularly in the rapidly changing Private Equity (PE) industry. Over time, investors have crafted an extensive array of techniques and methods to attain the most favorable conditions in their dealings. Whether through traditional tough negotiating or more cooperative strategies, investors are persistently in pursuit of a competitive edge.
Private equity investors aim to enhance their portfolio companies by going beyond simply negotiating the best price. This involves excelling in negotiation, pinpointing avenues for growth, boosting operational efficiency, and fostering long-term value creation.
Mijael “Mike” Attias, an acknowledged authority in the Private Equity domain and head of Merak Group, has pinpointed three pivotal strategies that, from his perspective, are often overlooked by investors and have the potential to significantly enhance value in their transactions.
3 Overlooked Approaches Mijael Attias Believes Can Revolutionize Your PE Operations
Drawing from his extensive experience, Mijael Attias has pinpointed three essential strategies that can aid in reaching your objectives. These approaches emphasize not only optimizing financial gains but also cultivating more robust and sustainable enterprises.
ESG: Beyond a Trend, a Competitive Edge
In today’s world, where environmental and social issues are becoming more prominent, integrating ESG (environmental, social, and corporate governance) principles into private equity activities has moved from being optional to being crucial. Mijael Attias notes that businesses showing a robust dedication to sustainability not only draw more investors but also often prove to be more enduring over time.
Incorporating ESG elements during the due diligence stage enables investors to identify concealed risks and areas for improvement that might be overlooked in conventional evaluations. Furthermore, by aiding acquired companies in adopting sustainable practices, Private Equity funds can create a beneficial impact on society while simultaneously enhancing the value of their investments.
Artificial Intelligence: an ally for due diligence
Artificial intelligence (AI) is transforming the execution of PE operations. Through the use of sophisticated algorithms on extensive data collections, AI can uncover patterns and correlations that might elude human observation.
Mijael Attias emphasizes that this technological tool not only accelerates the due diligence process but also delivers more comprehensive and precise insights into potential companies. It enables investors to perform increasingly intricate risk assessments, evaluate the capabilities of management teams, and make more accurate forecasts regarding market trends.
Investing in post-transaction growth: the key to long-term success
The process of creating value in a PE transaction continues well beyond the initial acquisition. After the deal is finalized, it becomes crucial to assist the acquired company in executing a strategic plan designed to meet the predetermined growth targets.
Often, acquired companies possess untapped growth potential. By investing in new product development, market expansion, and operational efficiency improvements, private equity funds can achieve significantly higher returns than through mere capital structure optimization.
Mijael Attias Revolutionized Private Equity
Attias identifies three key strategies—integrating ESG criteria, utilizing AI, and investing in post-transaction growth—that provide private equity investors with competitive advantages crucial for success. By adopting a more strategic and proactive approach, these funds can maximize value while generating a positive societal impact.
Learning from the most influential figures in the financial world, such as Mijael Attias, is invaluable for investors. His experience and market recognition provide strategic tools that can transform your investment approach. Leveraging this knowledge will allow you to optimize your decisions and boost the performance of your private equity funds.
