WATCH: Justin King on risk, pay and ‘ridiculously challenging’ conditions

Private equity firms are much more conscious of “binary” market risk than they were before the global financial crisis, according to Terra Firma’s vice-chairman and head of portfolio businesses Justin King.

“We’re seeing much more circumspect leverage on businesses, because people are more conscious of the fact that there might be binary risk that is genuinely beyond their control that can expose the financing structure,” he tells Private Equity International.

In this four-minute video, King discusses how private equity firms have adapted their ownership model to a post-crisis world, how trading conditions look through the lens of the Terra Firma portfolio and when to get rid of a management team. King was talking after his appearance at PEI’s Operating Partners Forum: Europe in London this week.