Name: Ian Cookson
Company: Grant Thornton Corporate Finance
I see it as simply as: Private equity provides capital and a market for smaller companies who simply are not suitable for public markets.
In the old days this role was played by conglomerates and the EPS games that went along with that. Without either of these, you are looking at private entrepreneurs backed with bank debt -- and certainly a less liquid (and perhaps more risk averse and slower growth) environment.
At the smaller end of the market there is therefore a real benefit and purpose to role of private equity. I am less familiar with the larger company end, where being public is an option and returns are more likely to come from financial engineering, but the case above is certainly less applicable.
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