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Private Equity Insights Q2 2025

Q2 2025

Uncertain times call for strategic shifts: As April 2025 ends, growing economic instability and concerns of a global recession are dominating business discussions everywhere, including private equity firms. Lack of clarity around U.S. trade policies, dramatic stock market fluctuations, inflation, likely global supply chain issues and tight credit standards are all contributing to weakened business confidence and reduced capital investment plans for many private equity firms.

In this issue of Private Equity Insights, we begin by sharing insights from Protiviti’s Private Equity Top Risks Survey Brief. Economic concerns, such as inflationary pressures and slower growth, are causing some private equity firms to focus more on enhancing portfolio company value and efficiency. Next, we continue the focus on key economic issues with a Protiviti Powerful Insights podcast on tariffs.

We follow with our Guide to Public Company Transformation. Private equity companies considering IPOs as an exit strategy and means for realizing returns will need to prepare for this complex business transformation in advance to gain any optionality. We close with our Global Board Governance Survey. Survey results show that disruptive leaders are better prepared to embrace change in a dynamic, evolving business landscape.

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According to findings from Protiviti’s latest Top Risks survey, executives and board members from private equity firms and their portfolio companies are facing several complex and interconnected risks — operational, macroeconomic and strategic — that could derail their value-creation efforts.

Value creation — the ability to transform portfolio companies, enhance operational efficiency and drive profitable growth within a defined investment window — is at the heart of the private equity industry’s mission. However, achieving sustainable value is more challenging than ever for private equity investors. Traditional strategies like leveraged buyouts, aggressive cost-cutting and financial engineering can no longer ensure success.

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Tariffs are the dominant issue of the day and the focus of our latest edition of Powerful Insights as we discuss how companies can assess and respond to them effectively in their organizations.

Without question, tariffs are dominating agendas and discussions in boardrooms, C suites and more as organizations try to figure out their impact on their products, services, supply chains, customer relationships and other areas. In this episode, Protiviti managing directors Kerry Buchar and Lucas Manganaro discuss these concerns and how organizations can address them timely and effectively.

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Initial public offerings (IPOs) often generate a great deal of excitement and can give new luster to company brands. It is easy to forget that IPOs can only thrive in the right business climate – and for organizations that have undertaken the business transformation necessary to reach this stage

Preparation is key: As this Guide to Public Company Transformation makes clear, preparing to become a public company is time-consuming and complex. Much of that complexity is due to the numerous legal and technical requirements that must be addressed prior to an IPO. An IPO is a significant and dynamic process for a company, where preparation for “being public” is just as important as preparation for “going public.” (Protiviti’s IPO Readiness Assessment interactive tool will provide some insight as to the scope and level of effort for planning.)

Bottom line: The objective of this Guide to Public Company Transformation is to help organizations focus on what they should have in place from a governance, technology and business transformation perspective to prepare successfully for an IPO.

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Disruptive leaders think about, plan for and invest in the building blocks that simultaneously strengthen their capabilities to disrupt and reduce the likelihood of being taken by surprise and disrupted.

Our survey results suggest disruptive leaders outperform less disruptive competitors in developing innovative organizational cultures, inspiring their people to think creatively and overcoming resistance to change. Their go-to-market intention is clear: Deliver superior customer experiences through business model innovation; build the necessary skills, infrastructure and processes to launch and scale new products rapidly and effectively; and differentiate market offerings through significant pricing or quality advantage.

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