Investors encouraged to invest in private equity

In recent years, it has become increasingly harder for private equity firms to buy companies at a bargain price due to the more competitive and efficient sales process. "The only controllable way to earn differentiated returns is to add value to portfolio companies," explains Andrei Vorobyov, a Partner at Bain & Company, "it is never too early for private firms to intervene in their portfolio companies." Vorobyov stresses that these firms should use a hands-on, collaborative model when working together. "Private equity firms can bring a full Rolodex of advisers to help the business. In some cases firms will have industrialists on the payroll who have had direct experience of running a manufacturing operation. It is often easier for managers of the underlying companies to talk to them than to the financial whiz kids who make up the bulk of private equity managers," he says.