August 23, 2024 - Citrin Cooperman’s inaugural Private Company Performance Report surveyed numerous private equity (PE) owned and privately held companies across the United States. Respondent's answers on revenue growth, AUM, and EBITDA were considered when determining whether PE owned or privately held companies are better.

Does PE owned or privately held matter?

Based on our survey, respondents say yes. Forty-three percent of PE companies experienced significant growth in revenues and AUM as compared to 29% of closely held companies. EBITDA revealed a similar story, with 40% of PE companies reporting significant growth in EBITDA as compared to just 25% of closely held companies.

Does PE have the secret sauce?

It depends on what a company wants. It is true that PE companies have a supply of almost unlimited capital and generally can access talent easier than privately held companies.

More important to this comparison, the objectives of PE companies are often shorter-term in nature than closely held companies. PE firms invest in businesses with the primary goal of creating a profit from a liquidity event, usually in three to five years. Therefore, a higher emphasis is put on creating explosive growth in revenues and free cash flow during the hold period.

Privately held companies often take a longer-term view on their investment returns. This includes research and development (R&D) projects and talent management.

Citrin Cooperman’s inaugural report covers comprehensive topics and aggregated responses from private companies across varied industries with a revenue size of under $10 million to over $1 billion. Access the full Private Company Performance Report for additional insights and commentary on the trends impacting private companies across the country.