The private equity market has grown exponentially over the past two decades, becoming a major source of global capital. Moreover, recent regulatory changes such as the Sarbanes-Oxley Act and D&O insurance pressures are raising the costs of public ownership and have, therefore, heightened interest in the private sector.

Amid the market’s dramatic growth, industry leaders also face a growing range of strategic challenges. As ever-larger funds pursue a diminishing pool of transactions, capital "overhang" has grown to historic levels and exit opportunities are harder to identify.  Successfully putting in place the right teams, systems, and structures are vital to achieving superior returns.

"What is not widely known is that two-thirds of private equity transactions fail to achieve their objectives, and most fail to do so in the first year," says Richard D. Foster, director in the New York office.  That means that origination and the strong implementation of performance programs for portfolio businesses have never become more critical, according to Foster. 

	Origination strategies.  The prevalence of M&A auctions has dramatically changed the landscape, creating a need for new origination strategies. New sets of maturing industries are emerging, such as computer hardware and software, telecoms, healthcare, some aspects of real estate. Increasingly, private equity firms are going to need to expand their knowledge base in terms of industries and geographies, and have the capability to evaluate increasingly common consortia and partnership opportunities.
	Short window for success.  Once investments are made, private investors must act swiftly and work closely with management teams on integration, articulate value creation targets, and implement new plans; "deal fatigue" and lapses in corporate governance are a risk.

"We bring a knowledge-based approach to our clients and the basic belief that identifying the means to enhance corporate performance early in each transaction is critical to overall success," says Foster.