It’s Not the Money. It’s the Culture. And Private Equity Still Doesn’t Get It.

In private equity circles, the same old story plays out: big money crosses borders, and spreadsheets rule the room. Analysts obsess over profits, efficiencies, and “synergies.” But behind all the polished pitches and tidy models, something more human—and far more powerful—is at work. Culture. And most investors still treat it like a footnote.

Global private equity deals hit record levels last year, with cross-border activity making up nearly 40% of the action. Much of that was big capital from the West flooding into places like India and Southeast Asia. But while firms celebrate “emerging market opportunities,” they’re often bulldozing the very foundations that make these businesses work—relationships, values, and trust.

The numbers speak for themselves. McKinsey says nearly 70% of M&As fail to deliver the financial results they promise. Why? Because cultural mismatches blow up integration plans. Founders walk. Workers quit. Customers drift away. And all those rosy forecasts? Useless.

Nowhere is this arrogance more damaging than in family-owned companies. In South Asia, many businesses aren’t just companies—they’re community anchors. They carry legacy, identity, and a duty to look after people, not just profits. But when foreign firms roll in with takeover plans, slash-and-burn restructuring, and boardroom buzzwords, it breaks more than contracts. It breaks trust.

Thankfully, a shift is starting. A few firms are waking up to the reality that money alone doesn’t buy success. They’re learning the hard way that real due diligence means understanding people, not just balance sheets.

Some, like Enventure, are leading the way. This U.S.-India firm isn’t interested in hostile takeovers or gutting businesses. Instead, it focuses on partnerships, where founders stay involved, legacy is respected, and communities aren’t thrown under the bus for quick gains. In one case, they invested in a rural Indian manufacturing company and helped create 200 new jobs—without erasing the founder’s vision or selling out its mission.

Compare that to Western firms that barge in, boot out founding teams, and spark mass resignations and reputational chaos. Time and again, they learn the same lesson: you can’t build anything lasting if you ignore the people who built it in the first place.

Private equity wants to play a bigger role in Asia’s mid-sized business landscape. Fine. But they need to stop acting like colonisers with capital. If they’re serious about long-term value, they must start putting culture and community at the centre of their strategy—not treating them as a box to tick.

Because in the end, it’s not just about deals. It’s about what’s left standing after the deal is done. The firms that will win the next decade won’t be the ones with the biggest wallets—but the ones with the humility to listen and the wisdom to adapt.

In cross-border investing, culture isn’t a “soft factor.” It’s the hard truth private equity ignores at its own risk.

Source: https://www.ukuncut.org.uk/culture-not-capital-is-the-quiet-power-in-cross-border-private-equity-deals/