How can your private equity firm provide additional value to portfolio companies? A recent Forbes article covers this topic, specifically discussing leveraging partner networks. In the article Connecting For Results: Private Equity Firms Assisting Their Portfolio Companies, a Grant Thornton survey found that four out of five of 162 middle-market private equity firms “are looking to deliver value to their portfolio companies by providing access to their network of contacts and resources.”
However, less than 10 percent of portfolio companies are getting meaningful introductions from the private equity firm partners due to an absence of a systemized process. It goes on to discuss effective methodologies that map out partner relationships and how they might benefit portfolio companies.
As an example, portfolio companies can suffer from cash flow issues due to inefficient systems and collections for accounts receivables. Equity partners could easily increase the overall value of these companies by introducing resources to clean up A/R and establish efficient back-office processes. In this video, Finding the Hidden Cash in Your Accounts Receivables Portfolio, President Pam Krank of The Credit Department discusses common private equity portfolio issues, timelines for cleaning up portfolio company accounts receivables and why A/R is pivotal to portfolio health.
Ask The Credit Department about services to improve the value of portfolio companies.