RIP PLC: The Rise of the Ghost Corporation

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From the mid-19th century to the end of the 20th, one form of economic organisation seemed to be displacing all others—the limited liability corporation with widely dispersed share ownership. Indeed in the 1980s, partnerships—investment banks, estate agents and legal firms—converted to corporate form, enriching the lucky individuals who happened to be partners at the time, while disappointing the hopes of more junior employees (the “mezzanine layer”) who had aspired to a future share of profits. Something similar happened as mutual building societies and insurance companies also became public limited companies (PLCs). State-owned industries such as telecoms, gas, water and electricity were privatised, and even agencies such as Companies House and the Royal Mint—which necessarily remained under public control—were restructured into corporate form.

But if the 1980s was the zenith of the listed corporation, the decade also saw the emergence of a very different trend. The buyout of food and tobacco conglomerate RJR Nabisco by private equity firm KKR was at the time the largest ever takeover bid, a drama of greed and ambition that inspired a bestselling book and then a film. Since then, the number of companies with shares listed on public markets that can be bought by individuals with modest savings has fallen sharply, at the same time as private equity has grown in importance. The trend continues to gather pace. In 2020, insurer RSA, bookmaker William Hill, and telecoms provider TalkTalk have been “taken private.”

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