Private Equity Council issues statement on new World Economic Forum study of private equity
WASHINGTON, DC, February 17, 2009 – The Private Equity Council today issued the following statement on the new study of private equity investments issued by the World Economic Forum. The WEF research team was led by Josh Lerner, Jacob H. Schiff Professor of Investment Banking at Harvard Business School, and Anuradha Gurung, Associate Director, World Economic Forum USA.
The statement should be attributed to Douglas Lowenstein, President of the Private Equity Council.
“The study released today by the World Economic Forum represents an important contribution to the body of research on private equity. Prof. Lerner and Dr. Gurung, their research team and the WEF are to be congratulated on this groundbreaking work.
“The study offers compelling new insights into the way that private equity investments strengthen companies and deliver benefits to the people who work for those companies — along with the overall economy. It strongly supports the proposition that private equity investments play a crucial role in driving economic growth, particularly in challenging economic times.
“The WEF study concluded that private-equity owned companies scored the highest in a scientific survey of management practices involving 4,000 manufacturing companies around the world, with particular emphasis on operational expertise.
“The study also found that private equity-owned companies increase their productivity in the two years after acquisition at a rate significantly higher than their peers, a finding that is fully consistent with the conclusions of earlier research sponsored by the Private Equity Council. The WEF study found that productivity gains are shared with workers in the form of higher wages.
“During periods of acute stress in financial markets, the study determined that productivity growth at private equity portfolio companies is 13.5 percentage points higher than for comparable business not owned by private equity partnerships.”
The complete study may be downloaded from the WEF web site at:
About the Private Equity Council
The Private Equity Council, based in Washington, DC, is an advocacy, communications and research organization and resource center established to develop, analyze and distribute information about the private equity industry and its contributions to the national and global economy. PEC members are: Apax Partners; Apollo Global Management LLC; Bain Capital Partners; The Blackstone Group; The Carlyle Group; Hellman and Friedman LLC; Kohlberg Kravis Roberts & Co.; Madison Dearborn Partners; Permira; Providence Equity Partners; Silver Lake, THL Partners; and TPG Capital (formerly Texas Pacific Group).
