• Industry: Private Equity
  • Type: Survey report, White paper
  • Date: 1/14/2013

Managing underperforming investments 

Managing underperforming investments
Most of the seasoned executives and non-executives we interviewed had experienced situations where a business underperformed against plan. When the going gets tough, the relationship between management and private equity backers can come under strain. When this happens, private equity directors naturally become concerned at the potential threat to the value of their investment and need to be very aware of how their skills can be best applied.

The non-executives and executives interviewed for this research suggested constructive actions that private equity directors could take to help address underperformance of portfolio investments.


managing underperforming investments

There are bound to be some up and downs in the relationship if the business isn’t performing according to plan, but the important thing is whether or not management and investor can work together and keep focused on the main goal of achieving a good exit in due course.

- Chairman, Business Services sector

When an investment underperforms, there is a tendency for them to want to run around and do things; demanding regular updates and conference calls. This is all about being seen to be taking action rather than really contributing to finding a solution.

- CEO, Chemicals sector


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