Post COVID-19: Rising from the Ashes

Abstract

This article details how a predictive risk model, combined with financial and legal deal structure and negotiation processes, will produce high-quality projects and secure cash flow, and can result in significant performance improvement of both margin and bottom-line earnings for private equity portfolio companies.

TOPICS: Private equity, risk management

Key Findings

• ▪ Portfolio margin improvement: Evidence shows that by scaling predictive analytics and harnessing data, a team of operational risk professionals can improve portfolio margins to the point where <1% operational losses on billion-dollar portfolios are achievable, resulting in direct portfolio margin improvement.

• ▪ Accelerated earnings: Private equity firms can quickly implement a five-part strategy for operational risk management focused on the sales and delivery lifecycle to accelerate earnings and create compounding growth annually across their portfolio companies.

• ▪ 99%+ earnings capture: By pairing an intelligent risk-sensing model with active deal and project intervention at the critical moment, it is possible to capture more than 99% of the revenue each year and drive it directly back into the business, positively impacting the value creation cycle.