Press: Impact of Private Equity Ownership

White Space Release Findings on Impact of Private Equity Ownership

1 June 2008

According to a report released today by White Space, private equity backed IPOs outperform the market by 20% during the first year after listing.

Much uncertainty exists around the true impact of private equity on the economy as a whole and on the companies that receive PE backing. Based on in-depth research of the private equity market, this report out today indicates that:

PE-backed IPOs outperform the market by more than 20% in the first year after listing

This outperformance is maintained into the second year of listing

The stereotypical image of the ‘slasher and basher’ PE house is generally unfair – Most private equity houses achieve increases in company value by looking beyond cost cutting and headcount reductions

Nick Edwards, Director of White Space, comments:

“Private Equity has come in for a lot of criticism over recent years. Our research shows that much of this is unjustified and that private equity ownership can deliver long term sustained economic gain. It is also not the case that private equity always primarily focuses on cutting costs to deliver returns. Many different ownership approaches are taken, often delivering gains to employees and customers as well as shareholders.”