How may the source of a private equity firm’s money affect me? for Guide to Private Equity

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A Guide to Private Equity

The BVCA represents private equity and venture capital in the UK and is devoted to promoting theprivate equity industry and improving the performance and professional standards of member firmsand the individuals within those firms.

BVCA mission statement

•Each year UK private equity firms provide severalbillions of pounds to form, develop and reshapearound 1,600 ambitious UK companies with highgrowth prospects.•Private equity makes managers into owners, giving them the freedom, focus and finance to enable them to revitalise their companies and take them onto their next phase of growth.•Private equity is committed, long term and risksharing. It provides companies with personalexperience and a stable financial base on which tomake strategic decisions.•UK private equity firms offer a wide range of sources, types and styles of private equity to meetmany different needs.•A great variety of businesses in different industrysectors benefit from private equity; from high to low technology and in different development stages,from start-up to large established companies.•In a recent survey 83% of private equity backedcompanies said they would not have existed at all orwould have developed less rapidly without privateequity. Over three quarters of the companies felt that their private equity firms had made a majorcontribution other than the provision of money.•Private equity backed companies outperform leadingUK businesses. Over a five year period, on averageprivate equity backed companies increased their:-sales by 30% p.a., more than three times thatachieved by FTSE 100 companies-exports by 20% p.a., compared with a nationalgrowth rate of just 2.9% p.a.-investment by 25% p.a., compared with anational increase of 2.3% p.a.•Private equity backed companies create jobs at aconsiderably faster rate than other private sectorcompanies. Over a five year period, the number of people employed by private equity backedcompanies increased by an average of 23% p.a.,against a national private sector employment growthrate of just 1.5% p.a. It is estimated that private

equity backed companies account for the employment

of around 2.9 million people, equivalent to 16% of thecurrent private sector workforce.

Private equity – investing in Britain’s future

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