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How does private equity support companies in challenging times? βThe benefit of the private equity model is to really invest for growth.
A private equity owned company doesnβt have to focus on the next quarterly report. It can take a long-term view. Research shows that in more challenging times, PE-backed companies get more support from their owners. Financially they are better equipped.β
In Private Equity back companies productivity tend to be higher I tend to continue to grow faster than comparable companies I'm Sophia Kulp-TaΜg, I'm a senior investment manager with the Swedish pension insurance company Scandia the benefit of the private Equity ownership model is the ability to to really invest for growth a private Equity owned company doesn't have to focus on the next quarterly report instead it can really invest, it can take a longterm view. Research shows that in more challenging times private Equity backed companies tend to get more support from their owners, financially they are better equipped they can take advantage of a crisis, they can position themselves better to be in a better situation when the crisis is over and this will be also in the great financial prices we saw it during covid as well with one strong owner or a group of owners very much aligned and a management team that also share the same vision the same objectives it's easier to make decisions fast and you can really invest in transforming these companies and with a longterm focus of 5 years and the focus that the company is of value also for the next buyer you can you can really go deep you can do a lot with the companies and the interesting thing is that these changes tend to persist also after the company has been sold so in private active back companies productivity tend to be higher I tend to continue to grow faster than comparable companies also after they have been sold.
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