In a recent LinkedIn post, Leemccabe challenges the conventional narrative surrounding the private equity market, suggesting that a shift from theoretical value creation to tangible operational execution is now paramount. Leemccabe argues that the industry has been waiting for market conditions to improve, but the reality may be that the market is waiting for private equity firms themselves to adapt.
The post, which dissects findings from Bain’s latest midyear report, paints a picture of a market still grappling with sluggish deal activity, stalled exits, and uninspiring fundraising. Leemccabe highlights that the traditional seven-year capital cycle is elongating, with a significant portion of buyout assets acquired in 2021 or earlier, indicating longer hold periods are becoming the norm.
“The market may be waiting for private equity to get better.”
Leemccabe critically examines the widespread focus on “value creation,” a term frequently appearing in investment committee memos. However, the author contends that simply stating a commitment to value creation does not automatically translate into results. The post suggests that the current approach, which includes assigning numerous portfolio companies to a single operating partner with limited resources, is insufficient.
The Demanding Landscape for Modern Private Equity
The analysis underscores the increasing difficulty in achieving historical returns. As Leemccabe points out, the EBITDA growth required to meet return expectations is now considerably higher than during the era of cheap debt. This necessitates a deeper level of operational improvement.
The New Metrics for Success
Leemccabe elaborates on the factors contributing to this challenging environment:
- Higher interest rates
- Elevated entry prices for acquisitions
- Extended investment hold periods
- More discerning limited partners (LPs)
- Management teams experiencing burnout
- The disruptive potential of Artificial Intelligence (AI) on portfolio companies, particularly in software.
The author emphasizes that in this new landscape, firms will be distinguished not by their rhetoric on value creation, but by their genuine operational capabilities.
“The firms that win from here will not be the ones with the best value creation language. They will be the ones with the operating depth to actually change the economics of a business.”
Prioritizing Execution Over Jargon
Leemccabe argues that the focus must shift to concrete areas of business operations that drive economic change. The post lists key areas where tangible improvements are necessary:
- Pricing strategies
- Sales productivity enhancements
- Driving digital demand
- Optimizing working capital
- Improving customer retention
- Streamlining procurement processes
- Redesigning workflows with AI integration
- Developing and retaining talent
Leemccabe concludes that while this emphasis on “actual execution” might be considered unfashionable, it is ultimately the most effective path to success in the current private equity environment.
“Actual execution, in other words. Terribly unfashionable. Usually works.”
The post serves as a stark reminder that in a market characterized by higher costs, increased scrutiny, and rapid technological change, the ability to fundamentally improve a business’s economics through diligent execution is the true differentiator for private equity firms aiming to thrive.
📝 About This Content
This article is based on insights shared by Leemccabe on LinkedIn.
📅 Originally posted on June 12, 2026 | View original post on LinkedIn →