Defenders of private equity firms are pointing to a new report as debunking some of the popular held theories about what impact private equity ownership had on firms.
The report, from British Private Equity and Venture Capital Association (BVCA) working with Ernst & Young, analysed 28 portfolio companies that met Walker Guidelines criteria by 31 December 2007 and 14 other companies that exited during the period 2005 to 2007. The findings show that private equity firms do not slash employment, instead adding 3 percent more workers. It also discredited the idea that the industry strips the assets of firms, as net fixed assets rose 17 percent between acquisition and December 2007.
But the Financial Times is reporting that critics of the industry will focus on the role of third-party debt in procuring deals.
For the full report, click here.
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