Private Equity in 2027: Higher stakes, tougher targets, new opportunities

By: Declan Feeney, Simon Whatson, and Wiebe Van der Kamp 

With pressure mounting on private equity firms to deliver stronger returns, expectations of procurement and supply chain are rising. Three predictions for 2027 explore how operating partners and portfolio-company leaders can respond. 

Private equity firms are facing mounting pressure to extract more value from investments they are holding for longer than anticipated. According to PitchBook data reported by The Wall Street Journal, nearly a quarter of PE-backed companies globally had been held for at least seven years as of September 2026. 

With exits delayed and original value creation plans under pressure, sponsors are increasingly looking to operational improvements to deliver stronger returns. 

Another round of procurement savings may not be enough. Sponsors want greater certainty that improvements will reach the bottom line, while growing scrutiny of AI investments is raising questions about their commercial returns. Supply-chain decisions could also increasingly determine which businesses gain ground on competitors. 

Here are three developments we expect to shape procurement and supply chain priorities for PE-backed businesses in 2027. 

As original value creation plans come under pressure, operating partners are revisiting expectations and challenging portfolio companies to deliver more ambitious results. 

In our work with PE firms, we're seeing sponsors set increasingly demanding procurement targets, particularly where initial improvement programmes have underdelivered or exits have been delayed. 

But raising the target doesn't necessarily make the opportunity any greater. The challenge is establishing what's genuinely achievable and what it will take to deliver. 

Sponsors are also becoming less willing to accept negotiated savings as evidence of success. They want to know how much has been implemented, what has translated into EBITDA, and whether those improvements will last. 

Yet identifying opportunities is only half the challenge. Turning negotiated savings into lasting EBITDA improvements often requires changes to how the business operates, with Procurement, Operations, and Finance working together to implement them. That demands dedicated resources, clear ownership, and sustained change management. Too often, the effort involved is underestimated, leaving a gap between savings identified and benefits realised. 

Portfolio-company leadership teams need to get ahead of changing expectations rather than simply react to them. This means maintaining a current view of spend and regularly reassessing where further improvements are possible, including beyond traditional sourcing. 

Better access to up-to-date spend, supplier, and contract data can help identify new opportunities and spot where savings are being eroded. For operating partners, a clearer view of procurement performance across portfolio companies can help determine where additional intervention is needed. 

In 2027, leadership teams will need to be more proactive in defining what's achievable and invest in the capabilities required to deliver it. More ambitious targets will achieve little without the organisational capacity to turn them into lasting financial improvements.

PE firms have invested heavily in AI, but the gap between experimentation and measurable returns is becoming harder to ignore. 

In our conversations with operating partners, we're hearing growing frustration about the volume of AI activity relative to its demonstrated financial impact. We expect 2027 to bring closer scrutiny of AI investments, including implementation costs and ongoing expenditure. 

AI can deliver legitimate efficiency gains, including reducing the resources required for routine procurement activities. But focusing solely on the cost of the function risks overlooking a much larger opportunity: enabling Procurement to deliver substantially more value for the business. 

AI can reduce time spent on routine analysis and transactional work while giving teams better access to the commercial intelligence they need. This creates capacity to address more strategic spend and improve supplier decisions. 

For newly acquired portfolio companies with limited procurement capability, this raises a more fundamental question: Why build a conventional procurement function only to retrofit AI later? 

Some businesses may have an opportunity to design procurement around AI-enabled capabilities from the outset, embedding technology into decision-making and everyday workflows rather than adding it to established processes later. 

But technology alone won't deliver these improvements. Stronger procurement performance depends on combining AI with specialist expertise and clear accountability for execution. 

Operating partners should therefore judge AI investments by the additional financial and commercial impact they enable, rather than adoption rates or hours saved. Portfolio-company leadership teams should also reassess how Procurement is structured and where AI can increase its contribution, ensuring that technology investment translates into lasting improvements. 

As trade disruption persists, companies that can maintain reliable supply while competitors struggle will be better positioned to protect margins and win market share. Those unable to secure critical materials or maintain service levels risk paying substantial cost premiums and losing customers. 

For PE operating partners, that changes the investment equation. Supply-chain flexibility should be assessed not only in terms of risk mitigation, but also its potential contribution to revenue growth and enterprise value. 

Portfolio-company leadership teams will need to build flexibility into sourcing and capacity decisions. This may involve alternative suppliers, more adaptable contracts, or targeted investment in critical capacity. 

But visibility without the ability to act quickly is of limited use. 

Supplier intelligence and early-warning indicators can identify emerging risks, but businesses also need cross-functional governance that enables timely decisions. Procurement, Operations, Finance, and Commercial teams must have clear decision rights and the authority to act before disruption affects customers. 

That might mean approving alternative suppliers or accepting a short-term cost increase to protect a critical customer relationship. 

These decisions involve trade-offs, and the lowest-cost option won't always deliver the strongest commercial outcome. Operating partners should assess investments in adaptability against the financial consequences of disruption and the opportunities that greater reliability could create. 

In 2027, the businesses that outperform may not be those with the cheapest supply chains, but those best equipped to keep delivering when competitors cannot.