“Back-to-basics” is a hallmark of the modern mindset. We favor simplicity over complication: organic over processed, whole over refined, glass over plastic. When it comes to investments, advisors recognize the value of alternatives, like private equity. But they may think of these assets as only using exotic financial engineering to drive value and too complicated to explain to clients. Advisors should consider an alternative reality: one of the main components of private equity performance is actually the most intuitive and easily understood—operational engineering. Or more simply put: running and improving a business.

Picture this: at a client event, you notice a private equity investor on the other side of room. She has drawn a small crowd. She tells an absorbing story about a big box all-purpose retailer that she and her team acquired and transformed—an established brand that needed help with strategy and operations. When she visited a handful of the chain's suburban Boston stores in November, she found beach umbrellas and lawn chairs still on the shelves and learned that they offered Mountain Dew at the cheapest price in the region but had never stocked Fresca, which was far more popular. Her colleague, who previously had run logistics for Amazon, studied the trucking patterns for the chain's shipments and found that there was room for wholesale rerouting. Their team quickly optimized the company's inventory and shipping, but then the financial crisis hit.

First, the private equity team shored up the retailer's financing, extending to 2012 and 2013 some low-interest-rate bonds that were set to mature in 2009-2010. Then, they took aim at the affluent consumer that suddenly felt wrong acquiring another Gucci handbag as she heard reports of the thousands losing their houses and jobs, and in the aftermath of the crisis, more BMWs and Mercedes could be spotted in Walmart and Target parking lots. Our private equity investor friend wanted to attract this demographic to her chain, forming a consumption habit that would persist even after the world had normalized. So, her team got to work upgrading the store's aesthetic.

This is an example of a classic PE buyout strategy: finding a solid company and then improving its operations. Operational engineering is a measurably important component of private equity returns. Prominent consultant EY found that for exits between 2006-2012, “the majority of ... total cash return for the companies in our sample... was driven by PE strategic and operational improvements.” This return element is recognized as distinct from stock market impact and is a form of alpha, or return attributable to manager skill. PE is filled with accessible turnaround stories such as this one.

When advisors talk about private equity for non-institutional clients, they often focus on the literal accessibility of true alternative investments. But there's another kind of accessibility which is often overlooked: although the skills and experience required to turn around companies are rare and specialized, the vast majority of clients already have the necessary reference points to understand and appreciate what it takes.

James Waldinger is CEO of Artivest, a tech-driven investment platform expanding access to private equity and hedge funds for advisors and their HNW clients.