The Evolution of Private Equity: Corporate Restructuring in the UK, c. 1945-2010

56 Pages Posted: 18 Sep 2012

See all articles by Steve Toms

Steve Toms

University of Leeds - Leeds University Business School (LUBS); University of Leeds - Division of Accounting and Finance

Nick Wilson

University of Leeds - Credit Management Research Centre; University of Leeds - Division of Accounting and Finance

Mike Wright

Nottingham University Business School

Date Written: September 12, 2012

Abstract

The paper analyses the role of private equity in restructuring the UK corporate economy. It develops a theoretical synthesis to show that the evolution of the PE industry and firms in which it invested were governed by the relations of corporate governance between investor and investee companies. Effective governance relations were a necessary condition for success and complement firm specific resources to create competitive advantage. Four case studies are used to show the contrasting effects of these determining factors, ICFC and Slater Walker, and the two waves of buy-out centered restructuring that developed with the maturity of the PE industry after 1980. In contrast to the evolutionary approach, the periodisations utilized in this study show that structural breaks associated with points of institutional reform are also necessary to make firm specific resource and governance determinants of competitive advantage operable.

Keywords: private, equity, venture capital, corporate restructuring, 3i, Slater Walker, management, buyout

JEL Classification: D2, G32, G34, N24, N84

Suggested Citation

Toms, Steve and Wilson, Nicholas and Wright, Mike, The Evolution of Private Equity: Corporate Restructuring in the UK, c. 1945-2010 (September 12, 2012). Available at SSRN: https://ssrn.com/abstract=2145445 or http://dx.doi.org/10.2139/ssrn.2145445

Steve Toms (Contact Author)

University of Leeds - Leeds University Business School (LUBS) ( email )

Leeds LS2 9JT
United Kingdom

University of Leeds - Division of Accounting and Finance ( email )

Leeds LS2 9JT
United Kingdom

Nicholas Wilson

University of Leeds - Credit Management Research Centre ( email )

Leeds LS2 9JT
United Kingdom
+44 (0)113 343 4472 (Phone)

University of Leeds - Division of Accounting and Finance ( email )

Leeds LS2 9JT
United Kingdom
+44 (0)113 343 4472 (Phone)

Mike Wright

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom
+44 115 951 5257 (Phone)
+44 115 951 5204 (Fax)

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