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Survey exposes conflicts of interest and unhealthy relationships between corporate finance and private equity communities

Unhealthy relationships between multi-disciplinary corporate finance firms and the private equity community have been revealed by research undertaken by Bluebox Corporate Finance.

The survey shows 58 per cent of corporate lawyers believe UK entrepreneurs are not always treated fairly where their corporate finance adviser enjoys a previous relationship with the private equity sponsor in a transaction.

The study exposes conflicts of interest that exist between corporate finance advisers and certain private equity sponsors in the UK mid-market; an issue that is preventing UK entrepreneurs from getting fair, impartial advice.
95 per cent of lawyers surveyed agree it would be in the best interests of UK entrepreneurs to know about existing relationships between their chosen corporate finance advisers and relevant members of the private equity community. Some 94.5 per cent say it is not in a client’s best interests for a corporate finance adviser to work on both sides of a transaction.

A requirement for obligatory disclosure of previous significant relationships between corporate finance advisers and the private equity would be supported by 96 per cent of lawyers, the survey confirmed.

In a move to stimulate more transparency in the UK mid-market, Bluebox is leading a call for a Register of Interests to be introduced for corporate finance firms to allow better decision making from UK entrepreneurs when selecting their adviser.

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