Why is private equity a better model of ownership compared with publicly traded companies?
Private equity is simply one way of owning a company. Sometimes the governance structure and the aligned interests of owners and management make it easier – and quicker – to develop companies or turn them around. According to research conducted by Cass Business School in April 2008, private equity-backed IPOs (both venture capital and buyouts) accounted for a remarkable 22% of the total number of IPOs on the London Stock Exchange Main and AIM markets. This research also demonstrates that private equity-/venture capital-backed companies floated on the stock market outperformed similar companies that had not received investment from our industry.
