Unlocking Operational Alpha: The Metrics Private Capital Firms Can’t Overlook

What gets measured gets improved, but only when tracked with precision and purpose.

Professionals in private capital markets are no strangers to metrics like EBITDA, revenue growth, and leverage. These indicators are foundational; however, many firms still face challenges turning these numbers into real-time, actionable insights across their portfolios. The issue often lies not in knowing what to measure, but in how effectively and consistently those metrics are tracked and used to drive decisions.

With growing expectations from LPs and increasing competition across asset classes, private capital investors need smarter systems that do more than simply collect data. They need tools that connect performance with value creation, giving teams clarity and control across every asset.

Here are five essential metrics every investor in private markets already knows — but many aren’t leveraging to their full potential.

1. EBITDA and Margin Trends

Most firms track EBITDA, but few go deep enough into what is actually driving the change. Are operating profits improving due to increased efficiency, reduced costs, or revenue gains? Are margins expanding across the board or in isolated segments?

To maximize the value of this metric, firms should regularly analyze EBITDA by segment, product line, or geography. Pairing these insights with operational improvement plans helps uncover what is truly delivering value and where strategy may need to shift.

2. Revenue Growth Versus Forecasts

Growth in isolation doesn’t say much unless compared against deal models or fund expectations. Actual revenue performance should be continuously benchmarked against original investment theses. This context reveals whether a portfolio company is underdelivering, outperforming, or simply shifting in an unexpected direction.

Tracking revenue growth consistently, and connecting it to drivers like pricing strategy, customer acquisition, and churn, enables deeper insight and quicker course correction when needed.

3. Cash Burn and Runway

Cash management is a critical concern across private capital strategies. Whether managing high-growth companies, capital-intensive infrastructure assets, or leveraged buyouts, visibility into liquidity and cash flow runway is essential.

Rather than waiting for quarterly updates, firms benefit from real-time tracking that enables faster decision-making, tighter oversight, and improved financial discipline.

4. Leverage and Debt Service Coverage

Leverage and capital structure risks remain central concerns across private markets. Monitoring key ratios such as debt-to-EBITDA and interest coverage is essential, not only at deal closing, but continuously throughout the holding period.

As market conditions shift, centralized and dynamic monitoring helps investment teams ensure covenant compliance, manage refinancing opportunities, and stay ahead of risk exposure.

5. Progress on Value Creation Initiatives

Every investment thesis comes with a plan, whether it's operational improvements, strategic repositioning, or platform expansion. But too often, these initiatives aren’t tracked with the same rigor as financial KPIs.

Connecting value creation initiatives to measurable KPIs allows investors to assess progress, assign ownership, and adjust strategies as needed.

Bonus: ESG Metrics and Accountability

ESG metrics are increasingly expected across private capital markets. Investors who can demonstrate meaningful ESG progress not only meet LP expectations but also build stronger, more resilient portfolios.

Integrating ESG into routine reporting — tracking emissions, diversity, governance practices, and more — enables transparency without creating additional burden. When ESG is embedded into the monitoring framework, it becomes a strategic asset, not a side project.

Final Thought

The firms that stand out are not those who track the most metrics, but those who track the right ones. With the right portfolio management platform, private capital firms can deliver true Operational Alpha, transforming data into insight and strategy into measurable impact.

Want to learn how Untap can empower your firm to streamline performance tracking and value creation?

Get in touch!