The private equity ownership model has proven itself during the downturn, according to Stefano Pessina, executive chairman of pharmacy chain Alliance Boots.
Addressing delegates at the British Private Equity and Venture Capital Association’s annual summit in London, Pessina said: “We would not have achieved our recent track record if we had been listed.”
He said that being taken private by Kohlberg Kravis Roberts in 2007 had allowed the company to accelerate its growth. “Together we invested in international expansion, our store and warehouse networks, key product brands, our people, and CSR,” he said.
“Our relationship with KKR is very good – we are very clearly aligned and have the same long-term approach and commitment to CSR,” he added.
Pessina said the recipe for success in a business involved the following ingredients: the right ownership structure; a strong management team that collaborates for the common good; long-term vision and performance focus; a focus on outstanding service and making employees a priority.
He also spoke about the global outlook for businesses.
“The disease of debt has gone too far and the cure will be painful,” he said. “A successful recovery will depend on getting the right balance between investment and cuts. Some countries, like the UK, are obviously taking deficit reduction seriously,” he said.
He singled out reasons for optimism however: “Many businesses have demonstrated their maturity in response to the crisis, and international growth engines are still robust: quantitatively in emerging markets like the BRIC nations, and qualitatively in mature markets.”