The private equity industry spent more than a decade being rewarded for financial engineering, and the habits formed in that era are now a liability. McKinsey estimates that leverage and multiple expansion accounted for roughly 59% of buyout returns on deals completed between 2010 and 2022, which means the majority of the industry’s performance came from conditions rather than from anything done inside the companies themselves. Those conditions have thinned out. What remains is the business of running things better, and Kristyl Nelson, President and Global Chief Operating Officer of Kindah Enterprises, argues that the profession has been structurally underweight on exactly that skill. Her framing is blunt: closing creates ownership, execution creates value, and the two have been confused for far too long by people who treat the signing of documents as the end of a process rather than the beginning of one.
Capital Is Not A Strategy
The most common failure Nelson identifies is not a bad thesis. It is a thesis that never translates into assignments. Every deal begins with a set of beliefs: that revenue can grow, that margins can improve, that an asset can be repositioned, that the current owner left something on the table. All of it may be accurate. None of it survives contact with an organization unless someone answers the operational questions underneath it. “Who’s responsible? What happens first? What needs investment? What needs to change? What should remain exactly as it is? How will we know whether the strategy is working?” Nelson asks. “That’s the part of investing I find particularly interesting. The moment the thesis has to leave the presentation and enter the business.”
This is also where she parts company with the reflex to solve problems by deploying more money. Nelson recognizes that capital funds expansion, technology, leadership and repositioning, but she rejects the assumption that a funding gap is the default diagnosis. Sometimes a business needs a better process, clearer accountability, a stronger management structure, better information, or simply more discipline around what it already does well. “I don’t only want to know where the money is going. I want to understand what the money is supposed to change,” she says. “And if we can’t clearly answer that question, I think it’s worth asking whether the capital is solving the right problem.” That test, applied honestly, would kill a meaningful number of investment committee decisions before they are made.
Understand It Before You Change It
New owners arrive with momentum and a mandate, and the instinct is to start moving things. Nelson treats that instinct as a risk rather than a virtue. Her first obligation after acquiring something valuable is diagnostic, not interventional, because the asset was purchased precisely for qualities that the buyer may not yet be able to name. Who do the customers trust? Which employees quietly hold institutional knowledge? Which processes work exceptionally well despite being unsophisticated? Why do customers keep coming back? “Value creation isn’t always about replacing what existed before you arrived,” she says. “Sometimes it’s about recognizing what’s already strong enough to protect, and then building around it.”
Once that understanding exists, the question becomes where intervention earns its keep. Nelson is candid that most businesses present 20 plausible opportunities at once, spanning revenue, margins, leadership, technology, customer experience, purchasing, expansion and underutilized real estate sitting on the balance sheet. Pursuing all of them is the surest way to accomplish none. “I’ve learned to respect sequencing,” she says. “What needs to happen first so that something else can happen second? Where will one improvement unlock several others? What can the organization realistically absorb? Value creation isn’t just knowing what to do. It’s knowing what to do first.” The capacity constraint is the part most financial models ignore entirely, and it is the one that determines whether a plan lands.
The Holding Period Is The Investment
The market has quietly made this argument for her. McKinsey reports that average private equity holding periods have moved beyond six and a half years, and that by the end of 2025 only 19% of companies acquired in 2021 had been sold, against a roughly 30% four-year exit rate in the past decade. PwC put the global inventory of private equity-backed companies at approximately 32,500 by the end of 2025, with a growing share held past their original target windows. Those are not exit-timing statistics. They are an operational burden landing on firms that were built to underwrite and flip, and they explain why 53% of the 300 global limited partners in McKinsey’s January 2026 survey ranked a sponsor’s value creation strategy among their top five manager selection criteria. Firms have responded by more than doubling the average size of their operating groups since 2021. Bain & Company describes the same shift, from identifying theoretical potential during diligence to executing against it from Day One.
Nelson’s read on what longer ownership demands is less about process and more about posture. “The holding period is the investment,” she says. “Time alone doesn’t create value. What you do with the time does.” She frames ownership as stewardship, a responsibility to the people executing the strategy, to the investors whose capital is deployed, and to whatever made the business worth buying. “If you’ve identified something valuable, you’re responsible for understanding how to make it more valuable without carelessly damaging what made it work in the first place.” For an industry holding roughly 32,500 companies, many of them longer than planned, that is less a philosophy than a job description. “After the lawyers leave, the announcements are made and the transaction officially closes, someone still has to wake up the next morning and make the investment thesis real.”
Follow Kristyl Nelson on LinkedIn for more insights on operational value creation, private markets, and the discipline of ownership.
