Brendan Barber has called for action from the UK government to investigate private equity before it fundamentally changes the nature of global capitalism. He said unions had to safe guard the proper practise of capitalism as private equity transforms the status quo.
“There needs to be an investigation of whether the growth of highly leveraged buy-outs is building up a speculative bubble that, if it bursts, would leave employees as the main losers.”
He said: “It’s time for action on private equity. The rise of super-rich private equity players is beginning to fundamentally change the nature of British and European capitalism.”
As further evidence of the transformation taking place the TUC cited the increase in private equity deals over the last nine years from 9 percent to 25 percent of all deals. UK public market capitalisation fell by nearly £50 billion (€73.3 billion, $98.6 billion) in the first half of last year. This could result in a dangerous reduction in the liquidity of capital the TUC report warns.
Barber will present TUC evidence to the Treasury Select Committee next month.
TUC evidence to the Treasury Select Committee on private equity proposes new accountability and disclosure requirements, new protections for employees of private equity-managed companies and further investigation of tax breaks in the private equity industry.
A group of buyout executives is also scheduled to appear before the parliamentary committee. Permira founder and managing partner Damon Buffini will join Kohlberg Kravis Roberts’ Dominic Murphy, The Blackstone Group’s David Blitzer and Peter Linthwaite, chief executive of industry body the British Private Equity and Venture Capital Association, will all give evidence.