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‘Cuddly’ capitalism needs a clear way to assess if it’s doing good

Here’s how some buyout bosses want to rejig their industry to meet public demands for a kinder form of capitalism.

Step one is to cut out all that focus on filthy lucre, fundraising and stratospheric pay cheques. No more conspicuous excess or Babylonian birthday parties. Then start focusing on more socially acceptable outcomes such as higher employment or more environmentally-friendly production.

Sounds likely? Well, who knows, but it is a message that has been broadcast by some grand old industry figures. Both the US buyout veteran Carl Thoma and Guy Hands of Terra Firma have mused about the possibility of private equity firms making such socially-aware investments, even floating the heretical idea of trading off lower financial returns for social impact.

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