More room to manoeuvre The middle market (companies with enterprise values of between $100 million and $2 billion) can offer greater opportunity for value creation, as it consists mainly of businesses that are innovative and growing. Often, they are more agile than larger private or public companies. For mid-market GPs, such characteristics can be attractive. Using their own skills and deep industry knowledge, they may be able to put in place strategic initiatives and make efficiencies in businesses that have greater scope for operational improvements. The value of dedicated teams With more managers spotting opportunities in the middle market, the number of teams devoted to operational value creation has risen in recent years. Operational drivers of value GPs can use several levers to professionalise businesses including enhancing sales and marketing, optimising product pricing, refocusing R&D, enhancing management and controlling costs. M&A is another common way for GPs to drive growth in portfolio companies. In summary private equity investors are shifting focus towards operational improvements, with the middle market offering a fertile hunting ground for value creation.