Value creation · 2026-06-20

Private equity's operating era: value is made through EBITDA, not financial engineering

By Massimiliano Moreni · 2026-06-20

Operating value creation is the number-one lever of 2026. Financial engineering is no longer enough: EBITDA growth, 100-day plans and governance that protects value are what count.

In brief

In private equity, returns now depend mainly on operational EBITDA growth, not on financial leverage. The skill capital pays for is the operating partner's: 100-day plan, margin discipline, and governance that protects value over longer holding periods.

The way private equity creates value has changed structurally. For years the main engine was financial engineering (leverage, multiples); today the share of value attributable to pure finance has fallen sharply, while operational improvement has become the dominant lever. The 2026 industry sources align: operations is the number-one value-creation lever, and most practitioners expect it to weigh even more over the next twelve months.

Bain's summary is memorable: 12 is the new 5. A deal that a decade ago needed 5% annual EBITDA growth to work now needs roughly double. And with longer average holding periods, the ability to genuinely grow the company matters more than entering at a good price.

What it means for those who deploy capital

It means the scarce — and therefore valuable — skill is the ability to execute: translate strategy into operating priorities, build a credible 100-day plan, lift margins, and keep ownership, board and management aligned. In capital-intensive sectors this requires understanding technical risk before financial risk.

How I work

I bring the operating-partner discipline into portfolio and owner-led companies: 100-day plan, EBITDA growth, oversight of transformations and governance that protects value. The engineering roots and the governance of a ~€1 billion European industrial programme are why capital trusts the execution, not just the model.

Frequently asked

Why is financial engineering no longer enough?

Because with normalised rates and multiples, leverage explains a much smaller share of returns. Value today is created mostly by growing the portfolio company's operating EBITDA — an execution skill, not a capital-structure one.

What is an operating partner and why is it needed?

Someone who supports the portfolio company in execution: 100-day priorities, margin improvement, governance. It is needed because, with longer holding periods and less leverage, returns depend on the real growth of the business.

Sources

Bain & Company — Global Private Equity Report 2026 · Simon-Kucher — Private equity's operational era (2025) · Alvarez & Marsal — Operational value creation (2026) · BCG — As Scale Grows, So Does Investor Ambition (2026)

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