In the past 25 years, private equity has approached value creation in a more and more operational way (at least among the top players). It evolved from “put a shitload of debt on this business and cut costs drastically” to building teams of operational partners (or portfolio managers, or value creation experts—depending on the lingo of the moment).
There’s still a long way to go. The ratio of three investors for every one value creation expert—and compensation structures that sit on a different grid—make it far from ideal to fully support a real value creation agenda.
And let’s be clear: this evolution wasn’t driven by a sudden desire to do better by businesses. The shift was forced by economics. Near-zero interest rates are gone. The easy money that fuelled mega-funds, sky-high valuations, and financial engineering has vanished. Volatility is back. Trade tensions and tariffs are rising. Growth is slowing. And the cracks are showing.
The challenge isn’t that private equity no longer works.
It’s that the rules have changed—and most players haven’t.
Exits are harder. Continuation funds—once frowned upon—are now necessary lifelines, though not without scrutiny. LPs are asking tougher questions as they wait longer for distributions. And in this environment, value creation isn’t just a buzzword—it’s survival.
And not just cost-cutting or “synergy capture.” We’re talking about real, operational value creation:
Launching new revenue streams
Serving customers in smarter, more digital ways
Using AI (yes, actual tools available today—not R&D dreams) to boost precision, decision speed, and outcomes
Embedding technology at the core of transformation, not the periphery
Too many portcos still run like it’s 2005. But PE firms that embed digital strategy and operational excellence at the center of their playbook will be the ones who deliver returns—and earn the right to raise again.
Private equity isn’t dead.
But the multiple expansion party is over.
It’s time to get back to building businesses. Strategically. Intelligently. Creatively.
Some top-notch funds were already doing this 20 years ago. Some are discovering it the hard way now. Yes, PE is in trouble—and same old, same old won’t cut it.
I’ve been in value creation—or transformation/innovation, depending on the buzzword of the decade—for pretty much my entire career. I’ve always taken pride and pleasure in maximizing the value of an asset. Over the past 25 years, I’ve seen the good, the bad, and the ugly. What follows are some of those experiences—and the best practices I’ve carried with me, relevant both inside and outside of PE.
🍪United Biscuits (France): My First Foray into PE Value Creation
Right out of business school in the early 2000s, I worked in finance at United Biscuits, a snack manufacturer in France owned by Blackstone and PAI Partners. This was my first exposure to PE—via a portfolio company—and I couldn’t help but admire the discipline: going through absolutely every line of the P&L (and balance sheet) and linking it to a value creation initiative.
And I say value creation—not just cost cutting. Yes, we cut costs. But a lot of those savings were directly reinvested in the business.
We improved packaging—not just by using cheaper material, but by making it trendier and more fun. We automated and expanded production lines and increased our global footprint (that’s when I first heard of Costco:)). We upgraded the ERP and brought technology to the shop floor.
I was responsible for tracking and reporting the progress of dozens of these projects to management—meaning I had to understand each one in detail. This was my first real fire test in operational value creation. That experience sharpened my interest in the space and gave me firsthand exposure to what the best PE firms can bring to their assets.
And it challenged the lazy stereotype that PE is only about debt loading, pension raids, and layoffs. What I saw was a thoughtful, highly structured effort to grow value—with strategic reinvestment, clear governance, and disciplined execution.
đź’»CGI (Canada): Bringing PE Thinking In-House
After crossing the Atlantic, I joined CGI. Not a PE firm—but an organization (and management team) that deeply understood how to grow enterprise value.
This was my first foray into tech. Around 2006, CGI positioned itself as a service company (a body shop) despite owning a wide suite of software solutions—used everywhere from defense to U.S. federal government, to major North American financial institutions.
The then new CEO, Mike Roach, saw what others didn’t: a gold mine of undervalued software assets, and a stock price that didn’t reflect their potential.
I was brought in as part of a SWAT team to rethink the software strategy: we restructured delivery models to grow recurring revenue (and thus attract higher multiples), automated and offshored low-value activities, and made tough calls on where to double down in product investment and where to sunset.
This approach worked. The company created long-term value. The stock climbed. And yes, my stock options benefited too. But what stayed with me was how powerful this combination of strategic independence and operational discipline could be.
But more importantly, CGI showed that this kind of value creation doesn’t require external consultants. We didn’t outsource the brainwork. We did it all in-house: no knowledge leakage, no future competitors trained on our dime, and no seven-figure consultant invoices.
One of CGI’s great strengths was its ability to apply PE-like portfolio logic within a corporate structure. It looked at each of its business lines not as cogs, but as standalone value drivers—with their own metrics, leadership, and performance levers. Head office didn’t command; it enabled.
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🏢Financial Institutions: The Missed Opportunity
Contrast that with what I later observed in financial institutions. The idea of managing businesses as independent value drivers just isn’t how banks or insurers typically operate. It’s either too macro or too micro.
Annual strategy reviews and tech capital allocations happen by business unit and roll up to a company-wide view—but the BUs are so large and fragmented that it becomes just an amalgamation of micro data points.
The result? A mountain of information, lots of reporting, massive resource allocation for processes that don’t really tie to value creation.. It becomes business-as-usual with incremental improvements—at best.
There’s also a pattern: big-bang transformation plans led by consultants: “Keep only six levels of hierarchy—save costs by firing the middle management (how useless!)” Or massive tech overhauls that fail quietly when the system glitches and everyone reverts to Excel. Or micro-level cost-efficiency efforts.
What I rarely see is a value creation approach starting from this simple but powerful question: What are the metrics that drive enterprise value in this business? Even if it’s not a standalone company, the question still applies. Let’s take the asset management groups in large banks. What if they were spun off tomorrow? How would they be valued? Then—and only then—should we look at the levers of value creation with that end state in mind. Versus macro or micro entry points.
CGI was good at this. They gave business lines autonomy—but with discipline, guidance, and friction. It creates healthy tension and accountability—traits that don’t always align with FI culture. But if institutions want real value creation, that’s the price.
đź”A Broader View: What I’ve Seen in Other Industries
After working across multiple industries and with companies of all sizes, I’ve developed several go-to litmus tests and because I’ve done a lot of digital transformation work, my eye tends to go there—especially since it’s often where the most value is hiding.
Are the founders highly technical and involved in strategy? Usually means too much capital in product, not enough in commercialization.
Is the CTO homegrown? If yes, digital transformation opportunities usually abound—new offerings, efficiency plays, customer experience, AI agents.
Where is the company located? U.S. and Israeli firms tend to be strong in commercialization. Elsewhere, often a weak spot.
What’s the cap table? Bootstrapped companies tend to be capital efficient. Those with large VC rounds often are not.
Where are they in the lifecycle? Series F and stable businesses both have transformation potential—but of very different kinds. Digital transformation is often the priority for mature companies.
đź’°Where Real Value Creation Happens
Ultimately, value creation starts with the exit in mind—and a clear grasp of what multiples are used in that industry.
The most effective value creation experts combine horizontal and vertical expertise. For example, take healthcare or financial services and layer in digital transformation or sales and marketing reinvention.
It’s not enough to be a subject matter expert. You need someone who’s seen playbooks across industries and knows how to adapt them—not just repeat them.
Value creation is not about theory. It’s about connecting the dots between real-world outcomes. And today, digital transformation is often the most powerful connector.
Peggy Van de Plassche is a seasoned advisor with over 20 years of experience in financial services, healthcare, and technology. She specializes in guiding boards and C-suite executives through transformational change, leveraging technology and capital allocation to drive growth and innovation. A founding board member of Invest in Canada, Peggy also brings unique expertise in navigating complex issues and fostering public-private partnerships—key elements in shaping the Future of Business. Her skill set includes strategic leadership, capital allocation, transaction advisory, technology integration, and governance. Notable clients include BMO, CI Financial, HOOPP, OMERS, GreenShield Canada, Nicola Wealth, and Power Financial. For more information, visit peggyvandeplassche.com.