Private equity buyouts: Go small

PRIVATE EQUITY

Despite the noise around mega-company buyouts, Jock Green-Armytage, investment adviser to JZ Capital Partners, says small buyouts can also be a worthwhile prospect for investors.

Investors seeking higher returns through private equity would have noted this summer’s mega deals across the pond. Firstly, the so-called ‘Sage of Omaha’, Warren Buffett, partnered with a private equity firm to buy Heinz for $28bn in June. Later, in September, Michael Dell partnered with another investor to acquire his eponymous computer firm for $25bn. The sums are enormous, but will the returns be correspondingly huge? Institutional investors understand the sector’s ability to provide strong returns over the long term. In the ten years to 2012, UK private equity funds have made an a...