A survey shows that private equity leaders name portfolio improvement as top priority in 2009.

Global private equity leaders are focussing on improving the operational performance of their portfolios over the next 12 months, new research commissioned by Celerant Consulting reveals.

In a survey of over 220 senior private equity executives across Europe and the United States, carried out by the Economist Intelligence Unit, a third (33%) admitted that the credit crunch has made them more likely to intervene in the running of their portfolio companies. The fact that private equity companies are looking to maximise their operational performance to ride out the credit crunch is reinforced by the fact the highest priority for recruitment in the sector is for operational specialists (17%).

"Private equity companies have to come to terms with the fact that some of their portfolio companies will be worth less than they paid for them," said Jon Moulton, founder and managing director at Alchemy Partners. "With the significant reduction in available debt, private equity houses will have to maximise the operational efficiency of their portfolio companies if they are to secure a decent return on their investments."

David Axon, head of private equity and M&A, Celerant Consulting, agreed: "The private equity industry finds itself at a critical junction. Over the next year there will be a marked shift from investment and financial re-engineering to focusing on the operational performance of existing portfolio companies. This does not mean enacting brutal cuts to slash overheads, it requires focusing on day-to-day processes to ensure that these are improved in a sustainable manner. Shrewd executives realise that maximising their operational efficiency will ensure their short-term survival and guarantee long-term growth."

Celerant is the largest independent global firm working in the operations management sector of the consulting market.