Barbarians at the Gate...or Liberators?

The March 26 issue of Newsweek carried some reassuring bits of information on private equity firms. Apparently an Ernst & Young study has found that PE firms double the value of their acquisitions in three and a half years. Also, a Citigroup study has concluded that over the last ten years companies acquired by PE forms have shown annual returns averaging 14% which is much more than the 8% delivered over the same period byy firms comprising the FTSE All Share Index. Finally, a Nottingham University study has found that employment at companies acquired by PE firms dips by 5% in the first year after acquisition but rises by 21% after four years. Clearly PE firms do a good job for their shareholders. I wonder if there is a study that looks at the way they treat employees of the companies they acquire? For instance how many of the acquired employees are around after 1, 2 and 3 years and how does this loss look at different levels of the organisation acquired? After all the total number of employees may remain unchanged or even grow but this may arise from new hires replacing those let go..