Balls. PE businesses strip out inefficiencies, simplify and improve processes, inject focus and drive, eradicate failing management and build value and growth. It is so much arse to claim that this is all smoke and mirrors through 'asset stripping' or unsustainable staff cuts.
The unions need to understand that too many businesses have headcounts that are in excess of their needs, generally as a consequence of inefficient processes, inadequate systems and management failure to keep an eye on COS and to innovate in how they deliver goods and services.
PE backing enables management the focus, time and backing away from the floodlights of the public markets to make tough decisions, and drive through change that leads to long term value.
Now some fool
will comment and say "a-ha, but many former PE businesses see their share prices dip after floatation". Remedial classes on 'value: what it is and how it is measured' will follow when I have the time.
Labels: private equity