In today's dynamic business landscape, private equity (PE) firms continually seek avenues to drive value creation within their portfolio companies. From identifying key challenges to unleashing growth opportunities, the journey towards maximizing potential demands a strategic approach. We caught up with Kush Tulsidas, a seasoned PE professional, to glean insights into the top challenges, growth levers, and strategies for scaling portfolio companies.

Q: What are the top challenges faced by PE firms when looking to drive value creation in their portfolio companies?

Change management. Change management can be the number one opportunity and also the number one challenge that firms encounter when looking to drive value creation with portcos. A value creation plan looks at how we can holistically improve the business, through a carefully prioritized set of initiatives. To drive change, there needs to be engagement, i.e. buy-in from the team. In my experience, companies that engage and do well with execution and change management tend to drastically outperform those that don’t, in performance and ultimately valuation.

Q: What are the key levers that PE firms should be focusing on to drive growth, both organically and inorganically?

Growth from an organic side can come from

• Volume growth - volume through growing share with existing customers, new customers, new product lines, new markets, etc.
• Margin growth, which in turn can come from price, customer mix, product mix, etc.

The ability to drive each of the growth areas will depend on one or multiple levers which could include the size of the TAM/SAM/SOM, your ICP, the team in place, the profile of the sales team, the incentive plan, sales process, go to market strategy, pricing strategy, etc. It’s important to diagnose the company’s ability on the relevant levers, which will vary from company to company, and address the foundational gaps to enable growth.

Q: Can you share your top tips and tricks to quickly scale portfolio companies and get immediate impact?

There is no one size fits all playbook to get immediate impact. It will vary company by company depending on various factors. What I will say has consistently worked for me is the approach. It’s important that I learn where the company can grow during due diligence, diagnosing the commercial capabilities to identify the roadblocks, and putting together a value creation plan that enables us to get there. And then getting alignment with the deal team and management team so we can all march together to execute our plan, including being fixated on measuring progress while being flexible to pivot if need be.

Q: Why will you be speaking at the Value Creation Summit in NYC on June 4?

I look forward to sharing what I have learnt on this topic, what’s worked and what hasn’t as well as learning from the other panelists’ best practices.

On June 4th, Kush Tulsidas will be sharing invaluable insights gleaned from years of experience at the upcoming Value Creation Summit in New York. The discussion with his fellow panelists, Mara Lamoureux Edgar at The Riverside Company, Bob Rumer at Adelphi Capital Partners, David Acharya at Acharya Capital Partners, and Jeffrey Wissink at CohnReznick will address how you can navigate the intricacies of value creation in the PE landscape