Why would a company want private equity investment?
The attraction of private equity investment to a company and to management is the opportunity for management to own a significant portion of their business. Aligned interests foster the sense of ownership that is the core rationale for private equity investment. Besides the infusion of capital, companies also benefit from the experience and insight that fund managers bring to the board room. In fact, according to our 2007 study measuring the economic impact of private equity in the UK, many companies felt that their private equity owners had made a major contribution outside the provision of equity. This included strategic guidance beyond financial advice, providing vital market information and access to their contacts.
