Firms run by private equity companies have been more productive in the recession

Looks as if the private equity model of growing businesses pays off with its extra alignment of interests. Factual article on the British PE scene:

Firms run by private equity companies have been more productive in the recession. The claims by the British Private Equity and Venture Capital Association (BVCA) were based on results from a portfolio of 47 major companies including Alliance Boots, New Look, Travelodge and CenterParcs. Based on results for 2008 and the year to March 2009, the firms' average productivity reached 7.7%, "significantly in excess" of the average 1% UK rate during the same period. The association's second annual report, which comes under new transparency rules for the buyout sector, said average annual profit growth was 11%, although employment levels fell after acquisitions were taken into account.

BVCA chief executive Simon Walker said the figures were "promising" given the bleak conditions. But he added: "While the profit and productivity growth figures are testament to private equity's focus on portfolio management through the recession, the economic outlook remains uncertain.

"Private equity-owned companies are not immune from the continuing recessionary pressures."

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