Private equity brings economic benefits, says expert

08 October 2007
Despite controversies surrounding private equity in the UK, it does not attract special treatment and is beneficial to the UK economy and companies, an expert has said.

UK economist for Capital Economics Vicky Redwood said that private equity was subject to "misunderstanding" and was treated the same in the UK as elsewhere.

It brought benefits to the economy by promoting efficiency and led to higher levels of investment, she said.

Statistics from analysis provider CMBOR reported that the private equity market in the UK during the first half of 2007 was worth more than £25 billion - almost the total for the whole of 2006.

"In many ways it promotes efficiency in the companies it takes over, because of the advantage private equity has over the publicly-quoted sector," said Ms Redwood.

"It might also lead to higher levels of investment than you would otherwise get."

High street chain stores involved in secondary buy-outs in the first half of 2007 included Threshers, Jimmy Choo and Phase Eight.

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