Investment in the UK retail sector by mid-market private equity: 2000–2008

Abstract

This study examines 107 ‘mid-market’ private equity investments in established businesses in the retail sector between 2000 and 2008. The research design comprises a bespoke data set built by the authors. Our reason for adopting this methodology is to create a specific data set on the retail sector which is derived from the views of private equity practitioners on what constitutes the mid-market in this sector. The findings from the data set lead us to present three conclusions which are of relevance to academics and practitioners. Firstly, the data set and related qualitative interview material suggest that there is no common definition of mid-market to report a diversity of private equity practitioner approaches to and definitions of the mid-market. Secondly, management capability in potential portfolio firms is a decisive factor in private equity investment in the retail sector but that it is not the key factor. Thirdly, mid-market investors in the retail sector find it difficult to realise an exit in terms of trade or sector buyers.