The Top 5 Trends for Private Equity Firms in 2024
In 2024, private equity firms are navigating a dynamic landscape defined by innovation and strategic evolution. As the year unfolds, we see five prominent trends poised shaping the industry’s trajectory.
Artificial intelligence (AI)
Artificial intelligence (AI) is expected to take center stage, revolutionizing the way private equity firms operate. From predictive analytics to risk management, AI will streamline decision-making processes and unlock new avenues for value creation.
Investments in infrastructure
Investments in infrastructure — particularly within the energy sector — will garner significant attention. With a growing emphasis on sustainability and renewable energy, private equity firms will capitalize on opportunities to support eco-friendly projects and drive impactful change.
Value creation
Value creation will remain a core focus for firms, driving efforts to enhance strategic and operational efficiency. By improving processes and leveraging technology, private equity players aim to boost returns and deliver sustained growth for their portfolios.
Working capital management
Efficient working capital management will emerge as a critical priority, enabling private equity portfolio companies to boost operational value and financial performance. By fine-tuning capital allocation strategies, private equity can help their portfolio companies enhance liquidity and drive profitability.
Retail channel
Private equity firms will explore expanded opportunities through the retail channel, embracing innovation and experimentation to diversify their portfolios. By tapping into consumer trends and emerging markets, these firms can position themselves for long-term success in a rapidly evolving economic landscape.
How we can help
This year promises to be transformative for private equity firms, marked by a strategic focus on AI, infrastructure investments, value creation, working capital management, and retail expansion.
CLA has the experience and specialization to help you embrace these key trends. Private equity firms poised to drive innovation, foster growth, and capitalize on emerging opportunities in the ever-evolving private equity ecosystem can be successful.
Craig Arends is a principal at CLA and is the managing principal of CLA's private equity practice. Craig brings a concentration of experience in providing accounting and transaction structuring advice for leveraged recapitalizations, purchase accounting and SEC reporting, assessing quality of earnings, and GAAP accounting. He has far-reaching experience with critiquing financial models and reviewing target companies' financial performance to identify cost reductions and/or operating efficiencies Craig has more than 30 years of experience in public accounting serving public companies, private equity groups, and companies, including a term as principal in charge of a Big Four Capital Markets Group in Moscow, Russia. He has led financial accounting due diligence projects for private equity investor groups and venture capital funds, primarily in the technology, communications, and manufacturing industries, as well as assisting with Foreign Corrupt Practice Act matters ranging from investigation of payments made, validation of compliance with corporate policies, and review of proposed transactions to ensure compliance. When not working, Craig enjoys watching any sports, but his most favorite are baseball, football and soccer.
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