Though that’s not entirely true. Chief executive Stuart Rose, as every commentator and his brother have already pointed out, still has a lot of explaining to do to his shareholders. And that is largely because they might have liked the chance to consider taking Green’s money.
This raises an interesting question for company managers like Rose. Who would you rather deal with – institutional shareholders while running a public company, or private equity investors within a private company?
It’s a tricky one because there are some obvious benefits for both. Some in the business, such as David Ascott, Grant Thornton’s head of private equity, believe life could be easier working for institutional shareholders, ‘provided managers manage the share price’. He says: ‘The quid pro quo is that they are not really involved in the business at all.’ Despite some recent high-profile examples, shareholder activism remains fairly conservative.
Land yourself some private equity backers, though, and you’re dealing with a whole different relationship. They’ll put their man on the board, they’ll be demanding and they’ll have some tough growth targets to meet to build the kind of value they want before they bail out. But then, they are the owners.
BDO Stoy Hayward’s private equity chief, Andrew Ware, sees some obvious benefits in this. At least when you’re shouting the odds over the company’s restructuring you can do it in private, without finding details of your terse exchanges all over the papers the next morning.
But it’s hardly likely that one will replace the other in popularity. Both have a place in the corporate armoury. It’s worth noting that in the second quarter private equity investments started finding a way out, once again, through flotation. This year flotations have so far generated £8bn worth of value. Now it takes two to tango in that game, the private equity players and the public markets.