Andrew Murray is right to be wary of too much private equity coming into our economy and turning large public companies private. Indeed, the use of debt rather than equity to fund their activity is a concern, as high levels of corporate debt would greatly heighten the risk of financial collapse and recession, given the over-leveraged state of the household sector at present.

Nevertheless, as he notes, private equity does bring a healthy level of flexibility and financial innovation to our economy. Its long-term benefits depend on its regulation. However, whether "the same governance, accountability, and reporting obligations of listed companies" could be reasonably applied to private equity companies is unclear.

If such standards are going to be applied to large private companies, this should be done uniformly on the basis of each company's size (assets or revenue), rather than discriminating on who owns it or whether it's "private equity" (however defined). Discretion is important, as excessive reporting obligations may have limited use on companies whose shares aren't publicly traded, and may limit commercial opporunities.

Greater, or more consistent, regulation of private companies must be done fairly and with sensitivity. However, in a corporate debt bubble (when negative consequences of private equity are most likely to arise), governance and accounting standards may do little to stop financial market collapses. There are few things governments can do to stop such bubbles arising (especially if tax or regulation changes sparked them, as in the late 1980s). The best regulation may be stricter limits on the amount of money that can be borrowed as a proportion of a company's assets, and flexibly implemented in bubbles when asset values become inflated.

Am glad Andrew Murray offered his article and Brad Ruting his corollary.
What's really being talked about is the whole problem of globalisation as capitalism's escape from Keynesianism since the 'seventies. The reversal of roles from capital as accountable trusted servant to civilisation, into a sort of Frankenstein monster to which all humanity is in thrall, warrants more careful negotiation than we previously thought, as we remember the Statebank collapses during the 'eighties euphoria. The real " March toward Serfdom" consists in a humanity allowing itelf to become prey to the caprices and whims of glib Gordon Geckos slyly operating under the smokescreen of wilfully unexplained mythic "market forces".
The plausible suggestion to arise is that under certain circumstances capital must be compelled to reveal itself, e.g. its origins, motives and bonafides directly or through sufficient evidence indirectly, or be let go elsewhere as it petulantly demands.
The big fear, employed through something akin to the sulks of a spoilt child manipulating an insecure parent, is what imposes compliance from timid politicians and intimidated societies.
But the Asian Meltdown and Dot Coms along with other examples mentioned, show what happens to investors and innocent social bystanders alike, when underlying fundamentals are not strong and all else of value is mortgaged on an intoxicated bet. Sometimes the risk is too great, and if capital units want to suicide in a hostile environment, who are we to sanction or cavil. But there is no cost high enough for our self respect,consciousness and independence. We must have accountability and some sort of guarantee in writing where or when we can impose one, or not at all.
Healthy communities like healthy individuals can't naively afford to hand over the "readies", for fantastical whimsies peddled by spivs; sight unseen. And if we have become too addicted to "that which moth and rust do corrode" like your proverbial junkie, we will just have to undergo another inevitable adjustment which may provide only belatedly an eventual dividend: the removal from a complacent society of its complacency.
"Caveat emptor" or, as Alanis Morissette sings, "thank God for Consequence"..

"....the smokescreen of wilfully unexplained mythic "market forces"."

"...capital must be compelled to reveal itself, e.g. its origins, motives and bonafides...."

Lovely prose funguy. Pure Rumpole.

May I add one of my own?

Money is the best way there is
To put the greatest distance
Between our actions
And their consequences

It's not that any of us are anti-capitalist. We have all grown up in it's shadow after all.

It's just that the free market is driven by the force of human desire, and we woke up one day to discover that the whole ethic had been swiped by those whose desire had turned into an obsession.

Andrew good article.I have worries about the Qantas deal from another perspective.Mansfield is a dubious corporate player.Dixon has long held the view that high labour costs were holding back
Qantas and he doesn't like negotiating with the unions.It is obvious to blind freddy that China is where the money is,so it would make long term commercial sense for Qantas to position itself before the competition is too strong.
The timing of the Tiger announcement is interesting.There is not a lot of money in many of the domestic routes for Qantas.I believe Dixon wants to reduce this commitment.Tiger wants to expand within the region,it takes on domestic routes ( fills the Qantas vacuum ) soaks up some of the current Qantas staff and helps deflect the consumer and electoral fallout.Tiger absorbs some Australian based
costs in order to get some Qantas routes into regional Asia.Qantas gets to become an even bigger international player with its cost structure based on China.It keeps its 'head office' in Australia but
China in effect becomes its hub.Under that scenario it would also pick up some of the domestic market in China.
Bruce Haigh