Over half of buy-out companies say that their private equity backers add significant value to their business, according to a survey from law firm Eversheds. Just under two-thirds of respondents had achieved their business objectives, with half of these outperforming their plans.

Over half of buy-out companies say that their private equity backers add significant value to their business, according to a survey from law firm Eversheds. Just under two-thirds of respondents had achieved their business objectives, with half of these outperforming their plans.

At odds with recent criticism of private equity firms, headcounts in three-fifths of the buy-out companies had gone up, with 18 per cent losing staff and 22 per cent remaining unchanged.

Richard Moulton, corporate partner at Eversheds, comments: ‘In the mid-market sector we are not dealing with Gordon Gekkos. The vast majority of private equity houses provide a supportive partnership which enables management to achieve their goals.’

For many companies, a private equity-backed primary or secondary buy-out appears to have been the only way to grow the business and provide an exit for the original owners. Only a quarter of the buy-out companies questioned had considered a flotation or trade sale.

However, the survey suggests there are limits to the value a private equity backer can add. Although 78 per cent of companies say their investors had a good or excellent understanding of their business, only 23 per cent receive operational, product or market support.

Eversheds questioned 50 companies which had undergone a private equity-backed buy-out in the last three years. By definition, all had continued in business.