Brexit & EconomyPoliticsIn the classroom: the march of private equity

In the classroom: the march of private equity

Although currently going through a controversial period, with criticism from politicians and lobbyists in several countries, in the last 20 or so years the private equity industry has taken off with firms like 3i, KKR, Permira, Cinven and Terra Firma becoming household names

This growth is driving the need for finance professionals to be fully versed
in what is happening within the private equity market. This is where practical
training on private equity and related disciplines can aid financial
professionals to stay ahead of the game as well as fulfil this year’s quota of
CPD hours.

The financial and other techniques used in the private equity industry are
not particularly new. But what is new is the combination of techniques employed,
including financial leverage, precise structuring of complex debt and equity
instruments, financial forecasting techniques, market research and due diligence
on the management team.

These project appraisal techniques are then combined with sophisticated fund
gathering techniques to enable each private equity firm to establish substantial
funds and then aim at the largest targets in the corporate field.

Of course, those already involved directly in private equity deals have a
primary need to keep up to date with what is happening. Relevant CPD training is
invaluable not only in ensuring they fully understand the workings of private
equity but also to give new entrants the confidence to become involved in a wide
variety of ‘real’ situations.

More broadly though, the requirement for a working knowledge of the variety
of techniques used and issues emerging in the sector applies to accountants
within a huge range of corporates, which could become the target of an attempted
or successful private equity approach, as well as advisers to these firms.

After all, when companies of the size of Boots and Sainsbury’s are ear-marked
as desirable targets, it becomes increasingly clear that this more than a
passing fad. Instead private equity has become concrete facet of modern capital
markets that we can ill afford to ignore.

As new investors are approached and new countries around the world begin to
consider the possibilities of developing their own private equity industry, the
demand for experienced people will continue to grow and alongside this runs the
need for continual personal development and training.

Bob Hawken is chief executive of professional
development at BPP Professional Education

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