Companies backed by private equity have seen improved or unaffected performance, new findings reveal.

Companies backed by private equity have seen improved or unaffected performance, new findings reveal.

BDO’s Private Equity Survey 2011 shows that of companies questioned, 96 per cent say that private equity investment has benefitted performance, or left it at its pre-deal level.

The findings come on the back of recent comments made by Labour party leader, Ed Miliband, who lambasted the private equity industry for being ‘asset strippers’.

Speaking at the Labour Party conference in September, the leader of the opposition singled out private equity firms for lacking the ‘values of British business’, branding them ‘predators’ rather than ‘producers.’

Of businesses surveyed 69 per cent said that the main focus of management over the past 12 months has been organic growth, with 75 per cent predicting that this will also be the case for the coming year.

Alex White, corporate finance partner at BDO, comments: ‘Contrary to widespread accusations that the private equity industry is guilty of stripping assets for short term gain, our findings prove that the overwhelming majority of private equity backed companies recognise tangible benefits from their investors’ involvement.

‘Moreover, the management teams are rightly concentrating on organic growth, confident that their business’s capital structure is well equipped for the current environment.’

Results of the survey also reveal that bolt on acquisitions are expected to be made to 49 per cent of companies questioned, with 81 per cent of corporate respondents saying that deals made in the past have added value.

The survey was based on interviews conducted with 50 senior decision makers from UK-based private equity houses along with 100 senior decision makers form UK-based private equity backed companies.