Value Creation Plan

The private equity firm’s documented operational improvement roadmap for a portfolio company, specifying the initiatives, such as cost reduction, margin improvement, capacity expansion, system implementation, and team restructuring, that will produce the EBITDA improvement required to achieve the fund’s return objective at the target exit multiple.

The value creation plan is a project plan with milestones, owners, and accountability mechanisms reviewed at every board meeting. 

It is not a strategy document, and its operational section typically drives more management attention than any other governance artifact during the ownership period.