According to a recent survey by BDO Stoy Hayward (which is the British member firm of BDO International, the fifth largest accountancy services firm in the world), smaller quoted companies (SQCs for the uninitiated) feel that private equity has more to offer than the public markets. This sentiment derives from that most SQCs (69% of them) feel the stockmarkets undervalue their business when listed.
66% of SQCs surveyed believe that the private equity funding model is better than the public markets as it incentivizes management and 67% feel that PE is better at understanding smaller companies. Moreover, 49% of SQCs said private equity would be better than the capital markets at investing for growth and acquisitions. Most importantly for dealmakers, 32% of those SQCs surveyed stated they were fairly/very likely to consider a public-to-private deal within the next few years, while 48% of institutional shareholders expect to encourage management teams to seek private equity funding for a public-to-private deal.
The survey included smaller quoted companies with a market cap of up to £250m.