Private equity needs to become more open. This review seeks to promote materially greater visibility of private equity, but without eroding its capacity to act as a positive agent of economic change and as a contributor to the UK economy through the concentration of significant cross-border private equity activity in London.
The importance of private equity has been recognised and supported by successive governments in the UK. But it has been inadequately explained, and its role and the ingredients in its success are not well understood. This is partly the result of the understandable tendency of many in the industry, who chose not to be in the public eye of the listed sector, to say that “private means private” and to be attentive to confidentiality to the point of secretiveness.
It is also the result of very rapid recent growth in a highly competitive industry, which has left many of the main industry participants focussing on winning deals and implementing business strategies in the companies they acquire with little attention to the wider context. Some of this recent growth has been driven by exceptional credit conditions which are at least partly cyclical in nature. Major secular influences are, however, also at work, and it seems realistic to expect that the industry will continue to grow in both relative and absolute significance both as a key feature of the UK economy but also as a major cross-border business phenomenon.
