How to measure aggregate drivers of equity value creation for across portfolios, Funds, and investment programs.
Calculate performance and valuation-driven equity changes despite evolving valuation metrics (i.e., going from pre-revenue to a revenue multiple to an EBITDA multiple).
Monitor value driver changes quarter-to-quarter to identify inflection points.
Estimate Internal Rates of Return without burdensome cash flow spreadsheets.
How private equity GPs tend to shift value creation from categories like Revenue Growth and EBITDA Growth into Multiple Expansion.
Measure private equity value driver as absolute ($) value creation, relative (%) value creation, times money value creation, equity return multipliers, and value creation IRRs.
The right way to set up Excel spreadsheets for the value creation models in this series.