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A report by the Centre for Management Buy-out Research shows that rival equity providers account for 33% of this year’s deals worth more than £100 million. In contrast, the figure for 2005 was only 8%, with no deals involving copycats completed in 2001.

The competition for deals comes from hedge funds, government-sponsored operators like Dubai International, family offices and wealthy entrepreneurs.

“The private equity industry is attracting a number of new kids on the block who believe that they will be able to make the same returns,” says Tom Lamb, co-head of Barclays Private Equity. “These new entrants are able to gain a foothold because there are virtually no barriers to entry provided they can persuade the banks to lend them shed loads of money.”

But despite the competition, Lamb believes private equity firms have the advantage over their rivals. “The successful private equity houses have a long track record of leveraged transactions that the banks know are well managed and have low loss rates. The private equity model can’t be learnt overnight â“ you can teach a turkey to climb trees but that doesn’t make it a squirrel.”

For Mark Pacitti, corporate finance partner at Deloitte, the rising number of copycat firms is indicative of growing interest in private equity led deals. “Private equity investors have had enormous success in recent years, resulting in copycat investors entering the buy-out market,” he said.

“The success of the private equity model has been noticed across the financial markets â“ even UK quoted companies are taking inspiration from private equity by designing high remuneration schemes to retain top managers.”

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