Can private equity meet public responsibilities?

Tessa Murray

Private equity-backed companies represent approximately 6% of all UK jobs and 5% of UK’s GDP. 13% of all pension assets are invested in private equity funds. We make the case for additional transparency and accountability.

We had our first Gather Around event on 30 January. We took the ‘Trust: Hard to win, easy to lose’ theme. Thanks to our exceptional contributors – Matthew d’Ancona, journalist and political commentator; Kate O’Neill, FRC; and Victoria Palmer- Moore, Powerscourt – we covered everything from Kier Starmer’s attempts to rebuild trust between the electorate and politicians to a forthcoming review of the Stewardship Code.

One part of our discussion touched on the gap between reporting requirements for listed and unlisted companies. Here are a few reasons why I hope – and expect – to see privately backed companies required to increase transparency and accountability in due course:

1. Investor protection

Regulations for listed companies are designed to protect the interests of shareholders and investors. Applying similar regulations to private equity-owned companies ensures that investors in these companies are afforded similar protections. This can include transparency requirements, financial reporting standards, and governance guidelines.

2. Systemic risk

Private equity-owned companies can significantly impact the broader economy, especially if they are large and highly leveraged. Applying consistent regulations helps mitigate systemic risks by ensuring these companies operate responsibly and sustainably. It can also help prevent excessive risk-taking and promote stability in the financial system.

3. Level playing field

Treating private equity-owned companies similarly to listed companies can help create a level playing field regarding compliance requirements and disclosure standards. This can prevent regulatory arbitrage, where companies may seek to exploit regulatory gaps by choosing different ownership structures. Similar regulations can foster fair competition and ensure that all companies operate under similar rules.

4. Public interest

Private equity-owned companies may substantially impact employees, local communities and other stakeholders. Applying similar regulations can help safeguard these stakeholders’ interests and protect their rights. It can also promote responsible corporate behaviour and prevent abuses that may arise without adequate regulations.

5. Market confidence

Consistent regulations across different types of companies can enhance market confidence and investor trust. When investors have confidence in the regulatory framework, they are more likely to participate in capital markets and allocate resources efficiently. Similar regulations can contribute to a stable and well-functioning market environment.

In 2021, PE-backed companies employed 1.9 million people – 500,000 more than the NHS and 6% of all the jobs in the UK. They generated £102 billion GDP – that is 5% of the UK’s total GDP. 13% of all pension assets are invested in private equity funds.* Paraphrasing satirist Jonathan Swift: “Sometimes regulation is like a spider’s web; it can catch the flies, but birds can fly right through it”. Maybe we need a bigger web…

* Source: ‘Measuring the contribution of private equity and venture capital to the UK economy in 2021‘ – April 2022. BVCA.

If you’d like to discuss this, or any other subject, please get in touch with Tessa Murray, Managing Director at

We’d love to know what you think.


Tessa Murray

Can private equity meet public responsibilities?

    Where should we send the download link?