According to the newly released 2025 SPS Private Equity Harvest Report, the private equity (PE) landscape is facing a pivotal moment. Economic uncertainty, prolonged holding periods, and limited traditional exit options are reshaping how firms think about value creation and deal execution. The report outlines a clear message: the old playbook of financial engineering and multiple expansion isn’t enough anymore. Operational efficiency, strategic talent, and executional rigor are the new currency of value.
At NEXT LEVEL Partners, we’ve supported private equity clients since 2003, and the report’s findings strongly align with what we’re seeing on the ground. Here’s our perspective on some of the report’s most urgent takeaways and how we help firms stay ahead of the curve.
Operational Efficiency Is No Longer Optional
The shift from multiple expansion to margin expansion is real. As the report explains, rising interest rates and cost of capital are forcing firms to double down on profitability, not just valuation. That means PE-backed companies must do more with less, streamline operations, and eliminate inefficiencies fast.
Through our Lean-driven transformation model, we help portfolio companies optimize their cost structures, accelerate EBITDA growth, and build capabilities that deliver long-term value. We don’t just analyze from afar; we go on-site, roll up our sleeves, and lead execution through kaizen events, value stream mapping, and problem-solving coaching.
Holding Periods Are Stretching Beyond Expectations
PE firms are holding assets longer, with the average duration now 1.15 years higher than 2018 levels. Longer hold times increase pressure to extract value through performance – not just patience.
We deliver measurable performance improvement in weeks, not quarters. For aging assets, we offer Needs Assessment Visits (NAVs) that pinpoint operational and leadership gaps quickly, allowing firms to make immediate improvements and pave the way for a more successful exit.
Stranded Assets and Backlog Bloat
There are over 7,400 companies held from acquisitions made between 2014–2021. That backlog represents capital tied up in underperforming or transition-stalled assets.
We’ve built a reputation for tackling underperformance head-on. Whether it’s quality issues, lead time delays, or customer dissatisfaction, our practitioner-led interventions help stagnant PortCos regain momentum.
Leadership Gaps Are Costing PE Firms Time and Money
While the report focuses on market forces, NLP knows that one of the biggest bottlenecks to value creation is leadership talent. We offer Interim Management solutions that place seasoned leaders into key roles immediately, ensuring no time is lost in critical growth windows. For long-term success, our Retained Executive Search capabilities find culturally aligned, performance-oriented leaders – especially those experienced in Lean, continuous improvement, and business system cultures like Danaher and Fortive.
Creative Exit Solutions Are on the Rise
Continuation vehicles and secondary buyouts now make up over 50% of secondaries volume. The demand for smarter, faster, and more flexible exits is clear.
When portfolio companies need to be exit-ready, we help ensure operations, teams, and reporting mechanisms are aligned. Whether preparing for a sponsor-to-sponsor transaction or a GP-led secondary, we help make the company look and perform like a premium investment.
The 2025 SPS Private Equity Harvest Report paints a picture of an industry at a crossroads. Aging portfolios, limited exit pathways, and growing LP pressure are shifting the focus from dealmaking to doing. At NEXT LEVEL Partners, we bring the tools, talent, and tactical expertise to help private equity firms not just weather the shift, but lead through it.
Want to explore how we can help your portfolio companies deliver stronger returns this year? Let’s talk.
