FTI Consulting Survey: Majority of Private Equity Leaders Say M&A Is Not a Top Priority for 2025

Core Insights - The 2025 Private Equity Value Creation Index by FTI Consulting reveals that M&A is the least prioritized value creation lever, with only 9% of global private equity leaders considering it their top priority for 2025 [1][2] Group 1: Value Creation Strategies - Private equity firms are focusing heavily on conventional cost levers such as cost structure optimization and supply chain management, while growth strategies are underutilized and face execution challenges [2][4] - Artificial intelligence (AI) has emerged as the top strategic priority for 2025 and is crucial for exit readiness, although it is one of the least frequently used and most challenging levers to implement [3][8] - Technology and IT are the most frequently used value creation levers, with 84% of respondents using them regularly and 77% rating their effectiveness as above average, yet they also present significant execution challenges [8] Group 2: Market Conditions and Trends - The current market environment is characterized by high uncertainty and low growth, leading firms to prioritize cost management as a means to protect value [4][6] - Despite M&A being a traditional tool for value creation, it is now viewed as less effective, with 67% of respondents indicating it takes over a year to realize expected value from such deals [8] - There is a notable gap between ambition and execution in integrating AI into operations, with 42% of private equity leaders acknowledging it as a transformative force, yet it ranks low in actual usage [8] Group 3: Execution and Governance - Successful value creation requires strong operational governance and collaboration among portfolio company leaders, operating partners, and deal teams to ensure common goals and effective communication [8] - The complexity and resource demands of growth strategies contribute to low execution confidence among firms, with commercial levers like pricing optimization and sales and marketing being among the least frequently utilized [8]