Journal of Business Ethics

, Volume 96, Issue 2, pp 249–263 | Cite as

Private Equity and the Public Good

Article

Abstract

The dominance of agency theory can reduce our collective scope to analyse private equity in all its diversity and depth. We contribute to theorisation of private equity by developing a contrasting perspective that draws on a rich tradition of virtue ethics. In doing so, we juxtapose ‘private equity’ with ‘public good’ to develop points of rhetorical and analytical contrast. We develop a typology differentiating various forms of private equity, and focus on the ‘take private’ form. These takeovers are where private equity funds are used to buy all a firm’s publicly listed shares. Take private deals reduce reporting requirements and lessen the amount of public scrutiny a firm comes under. They allow greater control of a firm’s assets and resources but also have effects in terms of the wider social fabric. The ‘public good’ and virtue ethics offer an alternative basis for theorisation of these deals. This provides a needed contrast to accounts of private equity based on agency theory.

Keywords

common good equity public interest public good private virtue 

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Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  1. 1.Birmingham Business SchoolUniversity of BirminghamBirminghamU.K.

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