The New Operating Reality

The PE landscape has shifted. With deals cooling and valuations under pressure, Bain has echoed our belief that generating returns now “comes down to actually improving the performance of portfolio companies,” not just financial engineering. In this new era of higher financing costs and investor demands, winning firms are revamping their models. As PwC observes, many leading funds are “reimagining their traditional business processes and seeking diversified investment opportunities to help drive change”.

PE sponsors are also upgrading their operating models. They are adding specialized teams (for example, digital analytics, pricing, or tax experts) within funds and portfolio companies, and building robust, technology-enabled value-creation plans. In short, success now requires active, tech-enabled ownership of portfolio companies. Those that cling to the old playbook will struggle.

Talent: A Source of Differentiation and Growth

In this environment, talent is the ultimate differentiator. Bain notes that today’s winners “know where to find value that others miss,” and the best firms build teams to capture those insights. A clear, differentiated strategy reinforces itself – it focuses deal-making and attracts top executives. Growth is nonnegotiable, because “firms that aren’t growing aren’t creating the opportunities or generating the wealth that attracts and retains the next generation of talent”. In practice, sponsors are adding new capabilities across the value chain: many now embed operating partners, data scientists, and commercial leaders into portfolio-company teams, and hire specialists into the GP ranks, to drive the growth agenda.

Key leadership imperatives include:

• Defining a clear ambition and differentiation. A compelling strategy not only guides investments but also energizes the organization. As Bain notes, even stating the firm’s ambition can be hard – “ask 10 senior people… 10 different answers” is not uncommon. PE managers must therefore articulate crisp, inspiring goals that align all stakeholders.
• Building agile, empowered management teams. EY reports that top PE-backed companies are cultivating “agile, change-oriented leadership” and human-centered cultures to drive performance. This means breaking down silos: McKinsey observes that in PE-backed firms, “silos between departments… have no place,” and CEOs must embrace a flat, cross-functional style. Leadership must be empowered, aligned, and accountable.
• Investing in specialized talent. Real value creation comes from upgrading the portfolio-company “talent structure”. That includes recruiting executives with deep expertise in analytics, pricing, marketing or operations, not just cutting costs. It also means upskilling and incentivizing existing leaders to execute the transformation. For example, many sponsors now deploy dedicated finance and strategy teams to optimize working capital and pricing, recognizing these as priority value drivers.

Delivering Post-Deal Value with Expert Advisory

These strategic imperatives often exceed the bandwidth of a single firm. This is where executive search and advisory become strategic levers. Lancor partners with PE sponsors to translate strategy into action. We help design new operating models and leadership roadmaps aligned to the investment thesis. For instance, when a fund enters a new sector, Lancor identifies CEOs and executives with relevant domain experience and scale track records. When a portfolio company embarks on a digital transformation, we recruit leaders skilled in AI or agile manufacturing processes.

Lancor’s advisory teams also support CEO transitions, succession planning, and board composition – all critical in the post-deal phase. We ensure that KPIs and incentives match the growth plan, echoing Bain’s call to reinvest in core capabilities. By providing market insights, interim executives, and change-management support, a dedicated advisor can accelerate a portfolio company’s turnaround. In effect, combining a PE firm’s strategic vision with focused leadership deployment becomes a force multiplier for value creation.

Embracing the Imperative

Bain’s message is unequivocal: the mandate is to deliver real value, not just smart structuring. The firms that adapt their operating models, strengthen their leadership teams, and drive portfolio growth will lead the next cycle. Strategy, people, and operations must work in unison behind a distinctive vision. In this evolving landscape, executive search and advisory firms like Lancor are strategic partners – assembling the right leaders and execution capability to turn these imperatives into sustainable outperformance.

Sources: Insights are drawn from Bain & Company’s Global Private Equity Report 2025.