Private equity firms failing investors

According to research carried out by Mergermarket, almost half of UK private equity firms are failing their investors by adding little or no value to the companies they are supposed to be supporting. The figures reveal that around 21% of private equty-backed in the UK describe their owners as ‘inactive’, whilst a further 26% categorise them as ‘relatively inactive’. PPN Ventures, who commissioned the report, said “The research findings reveal a surprising degree of absentee parenting.†Rhoddy Swire of Pantheon commented “The best private equity firms have a big input into their investments, but the worst devote much less time. Private equity firms have in the past been able to buy a company, pay down the debt and sell it for a fortune. These days you need to add value to make profit.â€

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