Comment: Response to the Walker report
Mark Spinner, corporate partner and Head of Private Equity at Eversheds, the mid market PE specialist law firm, comments on the latest proposals for a code of conduct covering UK PE firms put forward by Sir David Walker.
Spinner says: 'There is a big difference between the highly leveraged and high profile PE deals that are making all of the headlines at the moment and the way in which private equity is used for mid and small cap companies. PE provides many companies with a viable exit strategy either from plc status, family ownership or difficult trading conditions and can support firms as they look to expand and develop their businesses.
'We support the review and the focus it has on governance, but the majority of mid market companies are acutely aware of the need to work with PE companies to grow and expand their businesses. Any potential regulation of large PE deals will need to ensure that it does not add an unnecessary administrative burden or cut off mid market PE investment which provides vital support and funding for British business.
'In reality we do not see mandatory appointment of independent directors on the Boards of PE funded companies as a material departure from current market practice although there is likely to be a fierce debate over what constitutes independence.'
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