PE value creation model under scrutiny: traditional playbook losing to public markets

A new article argues that private equity's traditional playbook (leverage, cost-cutting, multiple arbitrage) is underperforming public markets, challenging the core value proposition for LPs. This has direct implications for micro-PE investors, who rely on similar strategies. The piece questions whether the model still works in a higher-rate, lower-growth environment. While not vertical SaaS-specific, it signals potential shifts in exit strategies and LP sentiment that could affect deal flow and valuation expectations. New: Q3 2026 PE zombie problem—4,600+ companies held 5+ years, $860B NAV aged—reinforces exit environment pressure and need for disciplined underwriting.