LONDON - A British minister has called for private equity groups, whose role in company takeovers have been heavily criticised by trade unions here, to propose arrangements that would increase transparency in the sector, in an interview published Thursday.
Speaking to the Financial Times, Treasury Minister Ed Balls -- who is close to finance minister Gordon Brown, seen as the likely next prime minister -- defended the groups, however.
“Nobody is saying that private equity unlisted companies need to meet the same level of transparency as listed companies,” Balls told the business daily.
“But I think there is a general view -- and it is increasingly understood by the private equity world -- that they do need greater transparency.”
“My message to private equity is that coming forward with proposals for greater transparency in the way they operate would be in the interests of their industry and the UK economy more generally.
“It is on that basis that we could see whether, case by case, the objective of boosting the long-term interests of the economy is being met.”
Balls stressed, though, that the government was committed to doing what was best for the City, London’s financial centre, telling the FT: “New companies with new ideas win in markets -- and the ones which don’t have good ideas fail. That’s the way an open and competitive economy works.”
“When you look at the evidence, on average, private equity investors have longer term relations -- they stick with firms longer -- than your average pension fund or listed company.”
His comments echoed those from Prime Minister Tony Blair, who said on Tuesday that the private equity industry brought many benefits to Britain’s economy, but noted that it was “important that everyone (in the sector) behaves