How Leading Private Equity Sponsors Leverage Working Capital

Amid an increasingly volatile macroeconomic and geopolitical landscape, the private equity (PE) sector faces mounting challenges across the deal lifecycle—from fundraising to deal execution and exits. In turn, PE sponsors are seeking strategies to extract increased value from portfolio companies beyond the traditional cost cutting exercises. One underutilized and effective strategy is to optimize a portfolio company’s cash flows to enhance overall business performance, create operational value, and unlock substantial returns.

By prioritizing cash flow optimization, management teams and PE sponsors can unlock valuable cash reserves for strategic reinvestment, elevating an asset’s quality and value.