Since Private Equity implies that information is kept rather private, there is a lack of general knowledge about this industry, and research data is hard to access. Nevertheless, the question of how value is created in Private Equity is not only interesting to investigate but also crucial to assess the performance of Private Equity as business model and asset class. The Private Equity business model is often perceived to generate extremely high returns by financial (debt) leverage and other financial engineering models. Due to the crisis and the consequently changed credit markets, the leverage model cannot longer be executed to the same extent as before the crisis. In this work, a distinction is made between operational and financial value drivers and, therefore, the central research investigates "How Active Portfolio Management Creates Value in Private Equity". Until today, only few scientists have done research and publications on this topic. Relevant studies - discussed in the literature review - are focusing on value creation on either transaction level or fund level. However, none of the present publications provides a detailed overview of those factors that influence the ability to create value in portfolio companies. Therefore, this work explains the ideal organizational setup of Private Equity firms and deepens into value creation drivers (for portfolio companies) such as the Operating Partner model, possible changes in corporate governance structures and operational improvements. Additionally, comparisons are drawn between value creation in public listed companies and portfolio companies of Private Equity funds. The case study differentiates between two different portfolio management models applied by one German Private Equity firm. In one of the portfolio companies, an active investor approach is applied whereas in another portfolio company a rather "old-school" passive investor approach is employed. Besides the ownership model, the case study also analyses various applied value creation drivers and the successful exit scenario. Literature and financial results of the case reveal that active portfolio management creates higher returns to Private Equity investments and builds sustainable value in portfolio companies. This comprehensive work on Value Creation in Private Equity can be understood as a macro study on existing knowledge and as guidance for employment of value creation drivers in Private Equity.