Carve-outs are particularly relevant in today’s private equity climate

The era of the ‘multiple play’ is over. Private equity can no longer rely on cheap debt and rising multiples to generate returns. “Broader due diligence and more active value creation have become increasingly important in recent years,” says Rob van den Berg. With holding periods lengthening and sale processes frequently postponed, investors are under growing pressure to create tangible value from within their portfolio companies, through sharper strategic focus and operational improvement. 

It is against this backdrop that carve-outs are gaining significant traction. According to Eight Advisory data, carve-outs have risen from less than five per cent of deals before 2020 to nearly a quarter of all transactions in 2023, a trend that has only accelerated since. Carve-outs are particularly compelling in the current climate as they combine an attractive entry price with the opportunity for operational value creation: a carved-out division is typically cheaper to acquire than a standalone business, precisely because it is not yet fully self-standing. Yet their execution demands specific expertise, from building a standalone organisation to managing the transitional services agreement (TSA) that governs temporary support from the parent. 

Successful value creation ultimately hinges not on strategic vision alone, but on execution. “They are the ones who determine whether a new strategy is actually put into practice and whether a business realises its potential,” Van den Berg notes, referring to the management and employees running the operation – a dimension that, in his view, must receive even more attention going forward. 

Read the full interview by Jan Bletz published in MenA.nl on 22 May 2026.