Exceptional

Buy a company, gear up and cash in. This may be the typical private equity wheeze, but they aren’t the only ones that can pull off this trick. The star example is Northumbrian Water. It was bought by a consortium of 30 institutional investors two years ago, saddled with nearly a third more debt and immediately floated. The initial investors paid £389m for a 75% stake. Based on the water company’s market capitalisation of slightly more than £1bn and £51m in dividends paid out, initial investors ...