Private equity seems to be an industry marred with controversy. In recent months, coverage around prominent merger and takeover deals has proven to be overwhelmingly negative. Private equity firms have been presented as exploitative and aggressive entities, taking advantage of companies at risk of falling into administration due to the challenges by the COVID pandemic and the recognition of the support that fresh investment in forms of both equity or debt can bring is quite heavily being portrayed as vulture funding.
Whilst it is true that private equity is taking advantage of current market conditions, that narrative has essentially overshadowed the importance of private equity, and indeed debt finance, as a catalyst for business scale-up and growth.
Without private equity and debt investment, the disruption caused by the pandemic would have been much more severe. As the country continues to transition out of lockdown, these same investment tools will be vital in helping established businesses adapt to the new normal while also serving the needs of startups in need of scale-up capital.
