IRR Is the Outcome. Trust Is Part of the Infrastructure.
Private equity ultimately gets measured in numbers: IRR. MOIC. EBITDA growth. Cash generation. Exit value. But none of those numbers happen by themselves.
Sources: McKinsey 2026 Global Private Equity Report (citing StepStone Group analysis); Journal of Management Studies, 2025 meta-analysis on team learning.
Underneath them sits an enormous amount of work: pricing, commercial execution, operational improvement, talent, technology, working capital, integration, and hundreds of smaller decisions made every day.
And increasingly, that work has to do more of the heavy lifting.
More of tomorrow's returns have to be earned in the operation.
According to McKinsey's 2026 Global Private Equity Report, citing StepStone Group analysis, leverage and multiple expansion accounted for 59% of buyout returns from 2010 to 2022. But the environment has changed. Entry multiples reached 11.8x EBITDA in 2025, while debt represented just 37% of entry multiples, seven points below the 2010 to 2022 average.
Underneath execution sits trust.
But underneath execution sits something we don't talk about enough: trust.
Not trust as a corporate value on the wall. Authentic trust. The kind that determines:
- Whether someone is willing to put a red KPI on the board before they know how to fix it.
- Whether the head of operations tells the CEO that the project is going sideways.
- Whether two functional leaders can disagree without becoming defensive.
- Whether someone can say, “I think we're wrong,” when everyone else in the room seems convinced we're right.
There is real research behind this.
A 2025 Journal of Management Studies meta-analysis covering 198 independent samples and more than 15,000 teams found psychological safety and trust among the important conditions associated with team learning. A second analysis of 53 samples and more than 4,400 teams found that psychological safety and learning helped explain performance and innovation outcomes.
Psychological safety doesn't mean being nice.
It doesn't mean lowering standards. And it definitely doesn't mean eliminating accountability.
We believe almost the opposite.
Then deal with accountability.
The play wasn't the point.
The 2017 Eagles offer a great example. By Super Bowl LII, Doug Pederson had built a culture where players were trusted to speak up and contribute. So on fourth-and-goal, with a championship on the line, backup quarterback Nick Foles could suggest the Philly Special and Pederson could simply respond, “Yeah, let's do it.”
The important part isn't the play.
The clock starts at close.
A PE-backed company faces its own version of that challenge.
New owners. New board. Often new executives. New expectations. New capital structure. New value creation plan.
Everyone is expected to move faster, while operating in conditions that naturally make people more likely to protect themselves. And unlike most organizations, you don't have years for everyone to slowly figure each other out.
Trust is part of the operating infrastructure.
At ITM Partners, that's why we view authentic trust and psychological safety as part of the operating infrastructure.
Because when teams trust each other enough to surface problems earlier, challenge each other honestly, find root causes faster, and implement better countermeasures, they don't just solve today's problem faster. They learn how to solve the next one better. And then the next one.
They get better at getting better. Over a private equity hold period, that's the kind of advantage that can compound.