The big news at Private Equity International HQ in London isn’t the small gathering of the world’s best athletes a few miles to our East, it’s the launch of our inaugural Awards for Operational Excellence.
It’s a big deal for us, and it should be for you too: the industry’s changed – for the better, many would argue – in that returns are increasingly being driven by operational change, not financial engineering.
And with legislators sceptically eyeing the industry, and the financial community as a whole enjoying less than favourable media coverage, it’s never been more important for private equity firms to demonstrate they can add genuine value to the companies that they own and operate.
That’s in part why we’ve launched these awards, and that’s why we hope you’ll enter as many of your fully realised investments that meet the criteria as you like. Nominations are invited from our three core markets – North America, EMEA and Asia – and a panel of independent judges with private equity industry and entrepreneurial expertise will select the winners from a shortlist in each region.
The judges include Thomas Putter, formerly the head of Allianz Capital Partners; serial entrepreneur and Financial Times columnist Luke Johnson; professor Eli Talmor of the Coller Institute of Private Equity; Jie Gong of Morgan Stanley Alternative Investment Partners; and Sir Edmund Truell, founder of Duke Street, the Pension Corporation and Disruptive Capital Partners.
There’s no shortage of investments that meet the criteria. According to recent research by Cambridge Associates, emerging markets-focused funds returned a record $12 billion to investors last year, while developed market managers (ex-USA) returned $32.3 billion, a 74 percent increase on 2010’s amount. The question, of course, is how much of that was created through operational change.
PEI’s Operational Excellence Awards are a chance for fund managers to highlight those instances. By promoting success stories and demonstrating not just to LPs but also to other stakeholders just what private equity can achieve from an operational perspective, GPs can help to address many of the existing misconceptions that plague the industry.
In so doing, GPs might also win some shiny (PEI) awards. We can’t promise gold medals, but we can promise the enduring respect of your peers and investors. What could be more precious than that?