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Opinion

Inside Investment: We couldn’t recommend a purchase

Anyone investing in private equity now is making a bet that the business cycle has been abolished. Caveat emptor.

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Would you rather be Philip Green or Stuart Rose? Both men are undoubtedly talented retailers and, by most benchmarks (even the high bar set by Euromoney readers), are wealthy and successful. However, while Philip Green can do exactly what he likes at Arcadia because it is a private company that he owns, poor old Stuart Rose at Marks & Spencer has to seek the approval of pesky shareholders for anything other than mundane decisions.

Complete operational freedom and the ability to pay yourself £1.2 billion, versus regular financial reporting and tiresome meetings with the teenage scribblers that pass for analysts in the City these days? It is a pretty simple choice. So when sharp-elbowed New York private equity firms such as Kohlberg, Kravis, Roberts & Co and Apollo Management LP launch publicly traded funds on the Amsterdam Stock Exchange it is interesting to examine their motivation. After all, private equity firms aren’t exactly famed for openness in their dealings.

KKR Private Equity Investors raised $5 billion and AP Alternative Assets $1.5 billion. Relatively speaking that’s chicken feed for private equity these days. Blackstone Group LP closed the biggest private equity fund ever last month when Blackstone Capital Partners V raised $15.6

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