'Private equity funds are hard taskmasters – they are there to make a return'
WHEN Waterford Wedgwood collapsed into administration in 2009, most of the company – including Wedgwood and sister brand Royal Doulton – was bought by U.S. private equity firm KPS Capital Partners.
Corporate finance specialist Nick Weston, a partner at accountancy firm Baker Tilly, which has an office at Festival Park, said there has been an increase in private equity funds investing in or buying companies because of the lack of credit available from banks.
He said: "It is on the up because there is a paucity of funds for companies wanting to invest in infrastructure or complete a management buyout for example.
"Some people view it as good and some bad. "Certainly private equity funds are hard taskmasters.
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They are financial investors so they are there to make a return on their investment.
"And 99 per cent of firms are investing funds on behalf of other people so it's not their own money.
"You could argue that private equity is a bit too short-term because they want to make a return in a certain time scale.
"They would do that by either selling the company or floating it on the stock market, although there are not a lot of flotations going on at the moment."