RT Journal Article
SR Electronic
T1 Post-COVID-19: Rising from the Ashes
JF The Journal of Alternative Investments
FD Institutional Investor Journals
SP 14
OP 20
DO 10.3905/jai.2020.1.115
VO 23
IS 3
A1 Jason Garick
YR 2020
UL https://pm-research.com/content/23/3/14.abstract
AB 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: Financial crises and financial market history, performance measurementKey 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 life cycle 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.