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  "documentTitle": "Conquering the next value frontier in private equity",
  "authorId": "Accenture",
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      "text": "PE firms are competing for a smaller pool of targets that can be polished by conventional value creation levers like procurement, quick cost takeouts or other tried-and-true interventions.",
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      "text": "PE dry powder for buyouts: US$1.3 trillion",
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      "text": "This impacted not only new debt, but also the ability to refinance at close to the same rate as before and the ability to complete recapitalizations on favorable terms. PE firms have therefore recently been forced to rethink their mix of cash-to-debt. The implications of this, as well as the need to protect and drive fund performance, are forcing PE to look for new ways to create value in both existing and acquired assets.",
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      "text": "Despite global uncertainty, PE firms invested as actively as ever throughout the pandemic, completing more buyouts than they have at any other time in history. The past few quarters, however, delivered a new set of challenges.",
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      "text": "Now, at nearly US$1.3 trillion, dry powder for buyouts is still near its all-time high, making competition for assets fiercer than ever before (see Figure 1B). PE firms are competing for a smaller pool of targets that can be polished by conventional value creation levers like procurement, quick cost takeouts or other tried-and-true interventions.",
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      "text": "Over the past few months, however, the traditional investment model of debt-to-equity has been challenged by a rapid rise in the cost of capital. Last quarter saw under US$20 billion in LBO-related debt issued, a total even lower than in the second quarter of 2020 when the pandemic struck the marketplace.",
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      "text": "Even with myriad disruptive forces, the industry did not slow down much. The PE space became more crowded, with a marked increase in both the number of active firms and assets under management (see Figure 1A).",
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      "kind": "quote",
      "text": "The growth of investible assets has not increased at the rate of capital that’s in the market chasing those assets. This means there’s more competition to buy great targets and it’s harder to make returns on those targets.",
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      "text": "\"The growth of investible assets has not increased at the rate of capital that's in the market chasing those assets. This means there's more competition to buy great targets and it's harder to make returns on those targets.\" — Operating partner, top 10 US-based PE firm",
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