In an LBO, value is no longer created primarily in the deal structure. It is created through execution.
The latest data from France Invest and EY confirm it. The funds say so themselves. This shift has a direct consequence: the leader and their executive committee become the first lever of the investment thesis.
Every year, France Invest and EY measure value creation in French SMEs and mid-sized companies backed by private equity. The 11th edition of their study, published in February 2026, covers 232 full exits completed between 2019 and 2024, including 34 in 2024.
The method breaks value creation down into three effects: the earnings effect, that is EBITDA growth; the multiple effect, meaning the change in the valuation multiple between entry and exit; and the debt effect.
For the 2024 exits, the earnings effect accounts for 88% of value creation, compared with 77% over the 2019-2024 period as a whole. The multiple effect accounts for 32%. The debt effect is negative, at −20%.
In practical terms, for the deals exited in 2024:
What creates value, then, is the operational performance of the business. Not financial engineering.
The study also details the sources of this EBITDA growth. For the 2024 exits, 53% comes from organic growth and 43% from external growth. Changes in margins contribute only 4%.
Winning markets, acquiring, integrating. These drivers have one thing in common: they depend on decisions taken every week by a leadership team, and on its capacity to execute them.
Successful external growth does not rest solely on the price paid. It rests on integrating teams, on clarity of roles, and on the executive committee's ability to absorb a change in scale. Sustained organic growth likewise requires an organisation that keeps pace and managers who carry the trajectory.
Leverage has not disappeared, but it comes at a higher price. In the France Invest / EY study, the net debt to EBITDA ratio for deals exited in 2024 falls from 3.8x at entry to 3.1x at exit, even though net debt rose by 75.1% on average. In other words, it was EBITDA growth, not debt repayment, that brought leverage down.
The interest rate environment reinforces this demand. In early October 2026, the yield on the 10-year French government bond (OAT) was approaching 5%, according to Club Patrimoine. When money costs more, every point of EBITDA counts for more. So does every execution decision.
Investors share this diagnosis. In June 2026, at the CNCGP's MidSommar event, Johan Didouche (LBO France) set out a three-point assessment: the multiple effect no longer offers room for arbitrage, the rising cost of debt forces a more rational use of leverage, and economic growth no longer carries companies' development. Value therefore has to be sought out.
He explained that, since the 2010s, LBO France has had an operational performance team that spends more than half its time inside portfolio companies, alongside their managers.
In the same discussion, Thibaut Mortelecq (Altaroc) described a paradigm shift. Financial engineering has become a commodity. Value will come from operational support for companies, notably through new management and new performance indicators.
The trend extends beyond France. Forvis Mazars' 2026 global private equity report, based on responses from more than 800 professionals, observes that investors are adopting a more hands-on, operational approach to value creation.
An ambitious business plan does not execute itself. Lefebvre Dalloz made the point as early as 2018: LBO performance now rests on operational value creation, hence the importance of ensuring management's motivation and capacity to execute ambitious business plans. The same article notes that investment by the inner circle of executives, at a minimum the CEO, the CFO and the sales director, is a condition of alignment of interests with the fund.
Behind the EBITDA, then, there is a leader, an executive committee, and the quality of their decisions under pressure.
Some issues appear on no dashboard:
Yet each of them weighs on every indicator the fund monitors.
If value is created through execution, supporting those who execute becomes a lever in its own right. It can come into play at every stage of the investment cycle:
For the fund, it secures the investment thesis. For the leader, it means lasting the distance. For the company, it means a growth trajectory carried by a team, not by a single person.
What is value creation in an LBO? It is the change in the value of the shares between the fund's entry and exit. France Invest and EY break it down into the earnings effect, the multiple effect and the debt effect.
What is now the main driver of LBO value creation? EBITDA growth. It accounts for 88% of value creation in deals exited in 2024, according to the 11th France Invest / EY study.
Why is the leader decisive in value creation? Because organic and external growth, which explain most of the rise in EBITDA, depend on the leadership team's capacity to decide and to execute.
How can a fund secure the execution of the business plan? By making sure, from entry, of management's motivation and capacity to execute, then by supporting the leadership team throughout the holding period. Investors are indeed taking an increasingly operational approach to value creation (Forvis Mazars, 2026).
Financial leverage is negotiated. Human leverage is built.
Sources: same as the French version.
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