Private equity firms understandably advocate the hands-on style that distinguishes them from other traditional portfolio investors. But does this active ownership really produce superior performance, ask McKinsey principal Joachim Heel and director Conor Kehoe ask in an article published in the McKinsey Quarterly .

The authors start by highlighting that recent McKinsey research has shown a strong correlation between “five steps that private equity firms can take to direct a company in which they invest and outperformance by that company – in other words, performance better than that of its industry peers.”

Research results s...