Private equity head stands down

Private equity funds are accused of not paying enough tax

The head of the trade body that represents the UK's private equity industry has unexpectedly resigned.

The British Private Equity and Venture Capital Association said chief executive Peter Linthwaite had left with immediate effect.

Mr Linthwaite's departure comes just days after he was widely criticised for a weak showing before the House of Commons Treasury Select Committee.

Private equity funds have come in for increased criticism in recent years.

I believe that it is now time for new leadership to take the BVCA forward to the next stage Peter Linthwaite

Snapping up a growing number of UK companies, such as pharmacy group Alliance Boots, they have been criticised for using too much debt to finance their deals, and cutting jobs at the firms they buy.

They have also been accused of using loopholes to pay lower tax rates.

Commentators expect the Treasury Select Committee to call on the government to ensure private equity firms pay their fair share of taxes.

The sector is also being investigated by the UK financial watchdog, the Financial Services Authority.

'Challenging two years'

The former boss of the British Private Equity and Venture Capital Association, John Mackie, will now return to work part-time for the organisation until a full-time replacement for Mr Linthwaite is found.

"This has been a fascinating and challenging two years," said Mr Linthwaite, who leaves after two years in the top job.

"Over this time the BVCA has grown and achieved much for its members.

"However the role of chief executive has changed immeasurably and I believe that it is now time for new leadership to take the BVCA forward to the next stage."

Some commentators say the private equity industry is now turning to the CBI, which traditionally represents big business, to defend its interests.