Many private companies have been on a longer path than expected toward refinance or exit. With deals conditions still inconsistent, many portfolio companies remain in extended hold periods. What’s changed is not just the timeline, but the expectation around how value is created during that hold, with more focus on both structural and operational levers to sustain performance over a longer period.
Owners and management teams are directing more attention, and capital, towards running the business better, especially with AI. Companies aren’t just talking about AI; they’re using it to improve customer experience, support finance teams, and drive efficiency. At the same time, sponsors are paying more attention to things like tax, HR alignment, and ERP systems, areas that may have received less attention when hold periods were expected to be shorter.
We’re also seeing more companies step back and ask: does our structure still make sense? Simplifying entities can improve transparency and governance, and even strengthen performance, but it needs to be done carefully to avoid unintended tax consequences.
At the end of the day, this is still about value creation, but with more discipline around where capital goes and what it’s expected to deliver. With extended holds becoming more likely, the near-term focus potentially should be on strengthening the business and building resilience, not just positioning for the next transaction.
Actions to consider: Pressure-test your capital plan against a longer hold: where are you investing to drive operational value (e.g., AI, systems, talent), and where is complexity no longer justified? For example, are you maintaining a legacy system that’s more costly than useful, or operating with an org structure that slows down decision-making? Then, consider aligning leadership and sponsors on a clear set of value creation priorities for the next 12–24 months. As capital, operating, and ownership decisions become more interconnected, staying coordinated across stakeholders becomes even more important to executing on those priorities.