PE-Backed Companies More Ready to Invest

By Shasha Dai

Private equity-backed companies are more ready to take risk and to invest in their business compared with their non-PE peers, a recent survey shows. The National Center for the Middle Market polled about 1,000 senior executives of U.S. midmarket companies, including 335 that are backed by P-E firms. Higher percentages of PE-backed executives say they expect revenue or the number of employees to increase over the next 12 months. The PE-backed camp also shows higher percentages of respondents that will likely add a new plant, expand into new markets, make an acquisition, take on new debt or see profit margins increase over the next year. As a whole, all respondents were more cautious in their business's outlook compared with the prior quarter, in part due to slowing economic growth in China and rising interest rates in the U.S., says the center's associate director Doug Farren.