PROF. MARC GOERGEN ON CORPORATE GOVERNANCE

The private equity deals that fail to justify 'fast buck' strategies By Marc Goergen , Cardiff University ; Geoffrey Wood , University of Warwick , and Noel O'Sullivan , Loughborough University There is an ongoing and very heated debate between the unconditional supporters of private equity and their opponents. It’s not hard to see why. On the surface, these investors can often buy fragile companies, load on debt to fund strategic change and sack workers in a bid for efficiency. It can look ruthless, but the industry claims it simply works. The British Private Equity & Venture Capital Association (BVCA), preach what they deem to be the undeniable benefits of private equity. For example, the trade lobby group wrote in 2010 that: Private equity investment has been demonstrated to contribute significantly to companies’ growth. Private equity backed companies outperform leading UK businesses. In contrast, Ed Miliband in his speech at the 2011 annual Labour Par...