Private equity: an unlikely resource for public companies in slow economies

Orit Gadiesh and Hugh MacArthur, consultants at Bain & Company, have written authoritatively on what public companies can learn from private equity in a new book (Lessons from Private Equity Any Company Can Use, Harvard Business School Press, 2008). In short, say the authors, the discipline of higher leverage, specific goals driven by compensation, and effective strategic planning for change over a 3-5-year horizon all force a corporate focus on results that drive firm value--which, in the private equity world, reduces to the paramount metric of free cash flow.