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Inefficient markets

Defenders of private equity say it improves efficiency, creates jobs and offers better returns to investors. But it runs against the trend for more accountability

By Michael Prest   May 2007

If you want to keep your business private, bidding for Sainsbury’s and Boots is hardly the way to go about it. But the fact that two of Britain’s best-known high street names should have received bids from private equity firms points to a lot more than the size and audacity of private equity these days. It also throws into sharp relief the dilemma increasingly faced by private equity: how to be really big and really private at the same time.

Contrary to the impression sometimes created by the industry, the principle of private equity is nothing new. It dates back…

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