Financial Stability: Private Equity Firms Debate
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Lord Hodgson of Astley Abbotts
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Financial Stability: Private Equity Firms
Lord Hodgson of Astley Abbotts Excerpts(1 year ago)
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Baroness Vere of Norbiton (Con)
I am afraid that the noble Lord speaks about things I have no knowledge of.
Lord Hodgson of Astley Abbotts (Con)
I declare an interest in that I am involved in the private equity industry. If we in the industry do not calculate the risks properly, build into our modelling the necessary degree of leverage and allow for it, is it not right that we should be allowed to fail? We should not just be kept alive when we have shown incompetence.
Baroness Vere of Norbiton (Con)
I completely agree with my noble friend. Private equity is all about risk and returns, and not all firms will succeed in perpetuity. That is the way of a capitalist market, and it allows the correct allocation of capital within the system.