Is the game of private equity changing? Perhaps we’re seeing something that management consulting experienced years ago. And no, I’m not talking about AI. I’m talking about the hard operational skills and financial returns expected in the private markets.

When I was at McKinsey, the magnitude of impact was driven not only by the experience and consistency of the team or the nature of the engagement, but also—often to a significant extent—by the maturity of the market in which the client operated.

In less developed markets, it was not unusual to generate a 20–30% improvement from a single consulting project. In more mature markets, however, even a 1% improvement in the bottom line could be considered a success. The easy wins had already been captured, competition was more sophisticated, and businesses were generally better managed.

It appears that private equity may be experiencing a similar dynamic.

A recent transaction by The Carlyle Group could be an example. Of course, when relying solely on publicly available information, we never see the full picture—the devil is always in the details.

Back in 2020, amid the uncertainty of the COVID-19 crisis, Carlyle moved decisively to acquire Flender from Siemens. On the surface, this may not sound particularly remarkable. Siemens is widely regarded as a world-class industrial company, known for its engineering excellence, operational discipline, and process rigor. It even operates its own consulting arm, Siemens Advanta, and has long been a destination for top management consultants.

Fast forward to yesterday (more info is here:https://discoperi.com/deals/triton-acquires-flender-gmbh-2026/), and Carlyle exited the investment. Based on publicly available information, the business was sold for approximately $3.5 billion, compared with an adjusted acquisition price of roughly $2.2 billion in 2020.

At first glance, the outcome may appear solid rather than spectacular. Assuming the deal had been financed entirely with equity, the annualized return would have been approximately 7.4%. However, that assumption is unrealistic. A firm like Carlyle can readily access acquisition financing and could likely have funded around 70% of the purchase price with debt. Under a simplified assumption of a balloon repayment structure, the equity IRR could have been closer to 18–19%.

Even then, these are back-of-the-envelope calculations. They exclude dividends, recapitalizations, debt amortization, management fees, operational improvements, and numerous other factors that influence actual returns.

Still, the broader question remains:

Where are the 30–50% IRRs that were once associated with the industry’s most successful deals?

Have businesses simply become much better managed before acquisition, leaving fewer operational levers for investors to pull? Has the increased competitiveness of auctions compressed future returns? Or is there something unique about corporate carve-outs from elite industrial players such as Siemens, where operational excellence is already deeply embedded, and the opportunity for transformational improvement is inherently limited?

Perhaps private equity is following the same path management consulting did years ago: as markets mature and companies become more sophisticated, generating extraordinary outcomes becomes increasingly difficult. The game does not disappear—but the margin for creating value gets narrower, and every percentage point becomes harder to earn.