Equity and charity
Private Equity's attempt to prove that it is caring and sharing by setting up a new charity has not been the public relations triumph it might have hoped (see what I wrote on 29 January).
If it was intended to demonstrate that uber-wealthy private equity partners are recycling some of the profits they make on buying and selling companies, it is not quite working out that way. One reason is that a chunk of the unimpressive start-up capital of £5.1m came from investment banks who were "invited" to make donations. As one banker said to me: "We were very conscious that if we didn't cough up, there would be a material impact on deal flow."
There is no doubt that private equity can have a positive impact on productivity and growth. But its management of what's normally styled as "external relations" is lamentable.
I'm 
°ä´Ç³¾³¾±ð²Ô³Ù²õÌýÌý Post your comment
How much of the "efficiency" that a private equity firm imparts on a business it buys, comes from its ability to lower the tax bill for the business? And how does this fit into the moral equation?
If a business pays less tax and thus makes higher profits for a private equity firm, that's good for them. But who else?
Robert very good - yes a sad piece of corporate "make up" to provide an allure of social conscience. We have seen a move away from the white knights of private equity to a darker breed of those looking to extract "value" and "increase efficiency of balance sheets" -which are euphemisms for extracting cash - we used to call it asset stripping 20 years ago!
I cite Debenhams!
Also I worry about the cross holdings they have in each others investments - if not watched this can provide a potential systemic risk.
kind regards
Justin
Not very surprising is it?
There still seems a vast conceptual ocean in business people's minds that seperate the ideas of meeting social needs and doing business. Hence the uber-wealthy 'donating' rather than investing.