MainSquare, a value creation operating partner, observes a recurring pattern in private equity: conversations often focus on deal-making precision and strategic narratives, while the mechanisms that translate those plans into outcomes receive less structured attention. From its perspective, the distinguishing factor increasingly relates to how effectively execution systems convert intent into measurable progress, a theme that becomes more visible deeper into the investment lifecycle.
This dynamic becomes clearer when viewed against the broader industry landscape. "Private equity firms are putting effort into finding new opportunities, shaping entry valuations, and developing investment theses that fit the market," MainSquare founder Mario Damasceno states. "These steps continue to matter as deal activity picks up again." According to an industry report, buyout and growth deal values rose significantly in 2025, reflecting renewed activity and confidence in deployment. Yet, as transaction activity becomes more active, the environment surrounding those deals has evolved into something more technically demanding, where outcomes rely on more than initial positioning.
As firms move beyond the transaction phase, a different challenge begins to take shape. Damasceno notes that post-close execution often receives less explicit structure, fewer dedicated resources, and less consistent governance. The result is often a noticeable gap between a company's strategic goals and what its operations are currently able to support. He adds that value leakage tends to emerge in this middle phase, where initiatives exist in planning documents yet encounter friction during implementation. "This 'messy middle' is the accumulation of small misalignments, delayed decisions, and fragmented ownership across initiatives," Damasceno explains.
MainSquare frames this challenge through a layered perspective on value creation. At the top, strategic leadership defines direction and priorities. At the base, functional specialists deliver specific capabilities. Between these layers sits an execution function that translates strategy into coordinated action. This middle layer, referred to as Layer 2, serves as the connective tissue that aligns priorities, sequences initiatives, and maintains accountability across moving parts. Without it, even well-constructed strategies may struggle to gain traction in day-to-day operations.
"Execution is where alignment becomes visible," Damasceno says. "A plan gains meaning when ownership, sequencing, and follow-through exist together." His experience across consulting and private equity environments led to the realization that leadership teams frequently operate at full capacity, leaving limited bandwidth to orchestrate transformation at the level of detail required. In this context, Layer 2 becomes about enabling continuity between intent and action.
The importance of this layer becomes more pronounced when considering how the private equity environment has evolved. According to a 2026 global private equity report, achieving target returns now often requires stronger EBITDA growth than in prior cycles. With multiples remaining elevated and leverage conditions less accommodating, firms increasingly rely on operational improvements to generate returns. This shift, Damasceno notes, places greater emphasis on execution discipline throughout the holding period, particularly in the earlier stages following acquisition.
At the same time, structural changes in the broader economy add another dimension. Six million small and medium-sized businesses are expected to transition ownership in the coming years, representing trillions in enterprise value. These transitions introduce both opportunity and complexity, especially in the lower middle market, where operational systems may still be evolving. Damasceno says, "In such environments, being able to translate strategic intent into repeatable processes becomes important to preserving and enhancing value during ownership changes."
MainSquare's role within this landscape reflects an emphasis on structured execution. Its methodology of assessing current operations, contextualizing findings into actionable plans, and implementing initiatives through coordinated partners aims to bring continuity across phases that are often treated separately. This structure emphasizes prioritization, progress tracking, and iterative adjustment, allowing leadership teams to maintain focus on broader objectives while execution advances in parallel.
Damasceno emphasizes the importance of sequencing within this process. "Transformation depends on understanding what must happen first, and why," he states. "Initiatives need to follow a clear order for progress to compound more naturally." This perspective reflects a broader observation that many organizations initiate multiple improvements simultaneously without fully aligning them to underlying business drivers. By contrast, a sequenced approach may help ensure that each initiative builds on the previous one, reinforcing overall impact.
The conversation around technology, particularly artificial intelligence, also fits into this evolving execution landscape. Damasceno argues that while AI continues to gain attention as a source of productivity and insight, its application within portfolio companies often depends on foundational readiness. "Many businesses operate with fragmented systems and informal processes. This can limit the immediate impact of advanced tools," he remarks. In this context, MainSquare views technology as an enabler that follows operational clarity, not a substitute for it.
As these dynamics converge, the role of execution becomes more central to how value is created and sustained. The combination of longer holding periods, evolving return expectations, and increased operational complexity suggests that performance will be shaped by the systems that guide day-to-day progress. Layer 2 can serve as a mechanism for maintaining alignment across stakeholders, initiatives, and timelines.
For a private equity-backed CEO, this perspective offers a practical lens for navigating the post-close phase. Damasceno says, "Strategic direction gives everyone a sense of where the business is headed, and the execution systems help outline how to move toward that goal. Having a team that brings initiatives together, keeps an eye on progress, and supports accountability can make it easier for the investment thesis to adjust as the business changes."
