Insight: From Buy & Build to a Holistic Value Agenda
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Every industry, assuming it endures, will see certain semantic shifts that mark its maturation. ‘LBOs’ became ‘private equity’, ‘cost savings’ became ‘synergies’ and ‘employees’ were recast as ‘human capital’. M&A growth strategies, now ever-present, have also been broadly repositioned as a ‘buy-and-build’ approach, with a focus on value creation as a critical component to success.
This linguistic drift reflects more than just changes in terminology. The private equity industry has indeed evolved, significantly so over the past quarter century. The financial engineers have given way to the builders; key people have been overshadowed by teams and systematic processes; and persistence, over multiple vintages, demands a replicable approach to sustainable, long-term value creation.
Survivorship bias — in an industry that rewards repeatability of returns — has also seen the industry continuously borrow from the innovators. From the outside looking in, it can now be hard to distinguish between semantics and a truly differentiated approach to operations.
As practitioners, we’re often asked how one approach to the ‘buy-and-build’ may differ from another. The answer, we’ve found, is that it’s not the ‘what’ that defines the strategy, but rather the ‘how’ and the ‘who’.