Some 96% of private equity backed companies says that their private equity investors have improved or not affected performance, according to the BDO Corporate Finance’s 2011 PrIvate Equity Survey, which polls the views of Private Equity Houses and their portfolio companies.. The main reason cited was the expertise and support provided, followed by access to capital. Only 4% suggested that performance had been harmed.
The survey also found that 69% of respondents agree that the main focus of management over the last 12 months has been organic growth, while 75% predict that this will also be the main focus for the next 12 months.
Furthermore 74% of companies surveyed currently consider themselves as being on a growth trajectory, while 76% agree that their business’s capital structure is appropriate in the current climate.
Alex White (pictured), Corporate Finance Partner, BDO LLP says: “Contrary to widespread accusations that the Private Equity industry is guilty of stripping assets for short term gain, our findings prove that the overwhelming majority of private equity backed companies recognise tangible benefits from their investors’ involvement. Moreover, the management teams are rightly concentrating on organic growth, confident that that their business’s capital structure is well equipped for the current environment.”
On average 71% of PE house’s current investments are on target or are ahead of achieving the original plan.
Bolt on acquisitions are expected to be made to nearly half (49%) of all companies surveyed. 81% of the corporate respondents who have made bolt on acquisitions in the past confirmed that these acquisitions have added value.
“It is encouraging to see that even in the current uncertain climate Private Equity houses are managing to successfully steer through their plans,” says White. “The steady stream of strategic bolt-on acquisitions for certain investments are fuelling deal activity and providing value.”