Pinstripe: Private equity; storm in a teacup?

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Related tags: Private equity, Business, Gmb

There's been a lot of stuff in the press recently about the private equity sector, much of which is absolute rot, in my humble opinion.Given that...

There's been a lot of stuff in the press recently about the private equity sector, much of which is absolute rot, in my humble opinion.

Given that private equity players have landed themselves a role in a number of pub company entities, I think it's quite appropriate to raise a flag on behalf of those who come in and inject some va-va-voom into a enterprise, knackered or otherwise.

I know there are those who point questions at pub operations owned by private equity companies and those who say the interests of the pub industry are not best served by such people.

But listening to private equity's critics, notably and most recently the GMB union people, you could be forgiven for thinking that these people are little more than carpetbaggers.

Surely the carpers should see there's more to it than that?

Yes, jobs can and do get swept aside when such entrepreneurs get involved in sorting out companies. And so yes, unions have their place in protecting workers rights.

But even they must appreciate they operate in the real world.

Modern day economics sometimes demand that job losses are inevitable in a business that has too much fat in it, but which has the potential to go on as a long-term business if put on a sounder financial footing. Jobs can actually be saved this way.

Pub companies that have gone down this route have often emerged stronger and better placed to take on what the world has to throw at them, usually by being bought by bigger groups who can keep the momentum going.

And as the chap from Alchemy has said in the press recently, one rarely hears such an outcry when publicly-listed or private companies take one another over.

So why is the furore whenever a group backed by some of the biggest financial institutions in the country does the same so much greater?

Envy, student common room politics or ignorance. Take your pick.

Related topics: Legislation

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