Management teams upbeat on private equity

Chief executives and directors of small businesses believe that private equity investment improves revenue and boosts employment, according to a poll by YFM Equity Partners.

YFM surveyed 165 chief executives and directors of small companies and found that close to half of those polled said an equity partner had contributed to revenue growth, while 80 per cent said a bank offered no more than finance.

Nearly 60 per cent of respondents chose their equity funder on the basis of the business support it could offer. Half of those polled sought equity to finance new product development and 44 per cent sought investment to grow new markets.

The executives indicated that equity did take longer to secure than bank debt, although 71 per cent received their whole equity funding requirement, while only less than a quarter received all of their debt requirement.

Directors also said equity investors were more supportive in tough times, with 46 per cent saying they received greater strategic and operational support from their equity backers during the credit crisis, while 45 per cent said their bank had changed their business terms.

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