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Ken Hanna, chief financial officer of Cadbury Schweppes, is a bigger fish swimming against the tide of executives from publicly listed groups moving to the private equity sector.
But Mr Hanna, who joined Cadbury from Compass Partners International, a private equity firm where he was an operational partner, admits that, on one count at least, the listed sector will struggle to prevent the flow of talent the other way. He says: “On a straight head-to-head battle on money, private equity will win.”
In other areas, the contrasts between companies owned by public shareholders and private equity investors are more nuanced.
According to Mr Hanna: “In private equity, you are still subject to a very significant amount of scrutiny from the banks and the private investors who lend you the money.
“Private equity firms in general move quicker. But you still have to be totally compliant with works councils, trade unions, banks’ regulations etc. It’s just that the clock is ticking – time is money in private equity.”
But he adds: “The number of abortive deals in private equity is high, and getting higher all the time. Some people go two or three years without doing a deal. There is always someone out there who can outbid you.”
As a former finance director at Dalgety, United Distillers and Avis Europe, Mr Hanna believes the biggest daily difference between the two types of company is that a senior public executive has “less control” over his or her diary, given the demands of results calendars, stakeholder meetings and the impact of unforeseen events.
He says: “You do have to roll your sleeves up a bit more in private equity than some people in a listed environment. But the days of when CEOs of listed companies had hundreds of assistants are long gone.
“It (private equity) is approaching a high point. It is a permanent part of the industrial landscape now. But not since the late 1980s have I seen comparable debt levels in private equity type deals. It is being driven by the availability of debt, the competition for deals, and the fact there have been very few failures.”
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