Historically, Private Equity (PE) firms have employed the Buy & Build strategy, with a philosophy of buying, fixing, and holding assets – with a plan to sell at the right time. However, for enterprise software companies, an increasing amount of value has been created by going beyond quick-fix initiatives to leverage multiple value creation levers and by capitalizing on digital transformation. A growing number of PE firms are now expanding their focus to accelerate product modernization, invest in product line expansion, and optimize engineering talent for their portfolio companies.
Some of the key trends in the Enterprise Software space from a PE perspective, include –
At a recently concluded Zinnov-Persistent Private Equity Leadership roundtable, we had senior leaders from across global PE companies share their perspectives on the winning value creation levers for the enterprise software sector, the differentiated talent strategy to maximize the potential for enterprise software companies, the key challenges that PE leaders face while executing transformation initiatives, and other key dimensions.
Here’s a snapshot of the trends and insights that emerged from this discussion.