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July 2011 | Adam Leach
at private equity companies should be carried out in the same way as at other
corporations, even though they have different ownership structures.
conducted by consultancy Associated Procurement
and the British Private Equity and Venture Capital Association said procurement had the
potential to make savings across their “portfolio” – the companies aprivate
equity firm has invested in.
may be the potential for private equity managers to exploit possible economies
of scale across the full range of their investment portfolios, thereby lowering
costs, increasing profitability and boosting returns,” said the report.
John Durrell, managing director at Associated Procurement, said it is not as
simple as combining the buying power of the individual companies.
is not about centralising procurement, it’s about getting professional
procurement organisations involved that can go out and reach all the various
dispersed areas in a private equity portfolio,” he told SM.
can’t go for a one-size-fits-all solution. However, you can use your market
knowledge to try to develop, with the management of those portfolio companies,
the right healthcare, fleet or IT solutions.
is about being able to rapidly and accurately provide insight solutions to how
you add value to these companies,” Durrell continued. “It’s not about spreading
added that one of the key challenges to improve procurement within the private
equity sector is increasing awareness about the value it can provide when
applied effectively. Saying that the procurement industry has “long suffered
from a low profile” (and in some cases “a questionable reputation”), Durrell
highlighted the need to promote “the kinds of business and performance
improvements that procurement professionals know can be achieved”.