Financial Stability: Private Equity Firms Debate

Full Debate: Read Full Debate
Department: HM Treasury

Financial Stability: Private Equity Firms

Lord Hodgson of Astley Abbotts Excerpts
Wednesday 13th December 2023

(5 months ago)

Lords Chamber
Read Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

I am afraid that the noble Lord speaks about things I have no knowledge of.

Lord Hodgson of Astley Abbotts Portrait Lord Hodgson of Astley Abbotts (Con)
- View Speech - Hansard - -

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 Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

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.