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In an era of compressed hold periods, rising operating costs, and increasingly competitive exits, Private Equity (PE) firms are being forced to rethink traditional playbooks. Marginal gains from pricing, lean operations, or bolt-ons are no longer sufficient on their own. To continue generating alpha, the best-performing firms are tapping into a high-impact, underutilized lever: globalization. They’re embedding global talent hubs from Day 1. Not just to reduce cost, but to build scalable, future-ready platforms.
Yet many still lack a repeatable framework to do this at scale. This Private Equity playbook outlines how forward-looking firms are embedding globalization into Day 1 of value creation, systematically shifting 30-50% of portfolio talent to global hubs like India, Mexico, and Eastern Europe. The result? 4-8X valuation uplift at exit, and a faster path to value.
Why the Smartest PE Firms Are Going Global – Fast
Globalization is no longer a back-office tactic – it’s a boardroom strategy. PE-backed companies are under pressure from:
High-performing firms are responding by:
Across leading Private Equity firms with US-headquartered Portcos (200+ tech employees), at least 50% have already globalized 30% or more of their engineering and IT teams. Firms like Marlin, Thoma Bravo, and Francisco Partners are proving that globalization is no longer experimental – it’s a deliberate, portfolio-wide strategy.
How Globalization Delivers Value
Globalizing just 30% of talent to strategic hubs like India or Mexico is no longer a tactical shift – it’s a proven path to Enterprise value. This move, now a best practice among top-performing portfolios, delivers both immediate EBITDA impact and long-term scalability.
The economics are compelling:
These savings flow directly to EBITDA. With exit multiples of 4-8X, every USD 1 Mn saved annually translates to USD 4 Mn – USD 8 Mn in incremental Enterprise value and those savings compound quickly at scale.
The chart above showcases four PE-backed companies that executed globalization initiatives during the hold period. Companies that globalized 35-40% of their R&D functions saw a valuation multiple increase of 3-8X, with exit valuations ranging from USD 1.8 Bn to USD 8 Bn.
The takeaway is clear: early globalization unlocks disproportionate gains. Firms that embed this lever from the outset consistently outperform those that delay or overlook it.
Step 0: Is Globalization Right for the Portfolio Company?
Before building, shifting, or scaling, ask: What are we solving for – cost, capability, or both?
Understanding the ROI Threshold
Historically, many Private Equity firms have evaluated globalization primarily through a cost-savings lens and it’s a compelling one. When shifting existing roles from high-cost to low-cost locations, the GCC model typically delivers strong ROI at scale, especially when:
In these scenarios, GCCs can unlock USD 5 Mn+ in annual savings and significantly improve EBITDA. However, early phases may require investment – severance, double-bubble costs, and additional leadership oversight, making a 9+ month time-to-value horizon important for maximizing ROI.
The chart below underscores a more important point: globalization isn’t just about cost arbitrage. While role relocation can yield ~50% savings, layering in productivity improvements and automation can exceed 70% in run-time savings – reshaping not just cost structures, but operating models.
Note: These productivity gains reflect an estimated 10% improvement enabled by strategic location choices. Automation benefits, while partially overlapping, contribute an additional 15% in savings – bringing total run-state impact to approximately 70-75%.
When the Threshold Disappears: Greenfield Teams & Capability-led Globalization
Not all globalization is about shifting existing roles. Often, the goal is to build new capabilities – changing the ROI calculus entirely.
Consider a 20-member AI team in India: it can be built at a USD 1.8 Mn lower cost, with comparable skills and faster hiring than onshore teams.
In these cases:
When building greenfield teams, the traditional ROI threshold disappears. Value enablement – not cost arbitrage – becomes the driver.
Choosing the Right Model: Cost, Speed, and Control
Use this decision framework:
Short hold period (<9 months): Use outsourcing for tactical or project-based workloads with minimal setup overhead
Longer horizon (9–18+ months) with strategic objectives
Greenfield capability builds (any time horizon, any size): Even a 10-20 person team can justify globalization if it’s net-new, resulting in significant savings and agility without transition complexity.
The takeaway: Don’t evaluate globalization through a headcount lens. Assess it based on:
Why a GCC Supercharges IRR and Compresses the Exit Clock
In Private Equity, speed to EBITDA = speed to IRR. A Global Capability Center reaching steady-state in 4-6 months can uplift fund-level returns by 300-400 bps without extending the hold period.
¹ Assumes relocating or building 50–75 roles (Engineering, Finance, Operations, or support) in a single hub.
² Based on a USD 300 Mn equity check and a five-year underwriting case.
Why this matters:
Bottom line
A GCC delivers the largest dollar impact in the shortest time. For PE firms seeking a faster, higher-IRR exit, it’s the clearest path forward.
If you’re evaluating the right operating model or aiming to launch a GCC in under 4 months, our team can help. We’ve advised leading Private Equity firms and Portcos on building scalable global operations.
Our follow-up blog will break down how to operationalize this strategy with a five-step playbook – from Day 1 post-deal assessment to building a transformation hub within three years.
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