The Extraction Playbook

Made Properly's directory rule is simple: a firm is removed the moment it sells to private equity or to public markets. On its face that looks like a judgement about people. It isn't — it's a judgement about a financial technique, applied consistently regardless of who is running it. This piece sets out what that technique is, how it is lawful, what it does to the businesses subjected to it, and — because the case against it is only as strong as the fairness of the case for it — what the industry says in its own defence.

The mechanism

A leveraged buyout works like this. A buyer puts in a slice of its own money — the equity — and borrows the rest. That combined sum buys the target company. The critical feature is what happens next: the debt does not sit with the buyer. It sits on the company that was just bought. From completion, it is the target's own trading cash flow that services the interest and repays the principal, not the fund that arranged the purchase.

Two further techniques commonly follow. A dividend recapitalisation: the target borrows further and pays the proceeds to its new owners as a dividend, sometimes within the first few years of ownership and well before any eventual sale. And sale-and-leaseback: the target's own freehold property — shops, warehouses, distribution centres — is sold, often to a specialist property investor, and leased back on a long-term contract. The one-off sale proceeds can be returned to the owners or used to pay down acquisition debt; the leaseback converts a free, owned asset into a fixed, permanent rent obligation for as long as the lease runs.

None of this is unlawful. All of it is disclosed, to varying degrees, in company filings, and every transaction below was reported in mainstream financial or trade press, or was the subject of a public regulatory or parliamentary finding. The question isn't whether it's legal — it plainly is — but where the value goes, and who carries the risk if the trading business hits a bad few years while the debt is still there.

Debenhams

Within about three years, roughly £1.1–1.2bn was returned to the sponsors. That figure is often quoted as a dividend payout alone, and that overstates it: it's a mix of special dividends paid while CVC, TPG and Merrill Lynch still owned the company, and the proceeds of selling 57% of the business at Debenhams' 2006 flotation — around £950m — while the sponsors kept the remaining 43%. Selling most of a company at flotation and paying dividends from it are different things, and the honest account keeps them separate rather than folding both into one larger-sounding number.

On 1 December 2020, Debenhams announced it would be liquidated, trading at that point from 124 UK stores, putting around 12,000 jobs at risk. A widely circulated figure of 25,000 jobs lost conflates Debenhams' 12,000 with the roughly 13,000 at Arcadia, which collapsed into administration the day before, on 30 November 2020 — a separate company, under separate ownership, that happened to fail within 24 hours of Debenhams. The correct figure for Debenhams alone is 12,000.

What caused the 2020 collapse is genuinely contested, and the honest version holds both explanations rather than picking one. Commentators including Prof. Prem Sikka have argued the 2003–2006 debt load, and the reduced capacity for store investment that came with servicing it, left Debenhams unable to invest at the level its competitors sustained for the best part of a decade. Retail analysts writing around the 2020 collapse itself — among them Karl McKeever and Richard Khalaf — pointed instead to an ageing, oversized store estate and the accelerating shift to online shopping through the pandemic; Debenhams' brand health index fell from 30.9 in 2010 to 21.8 in 2020, a long decline rather than a single shock. The honest synthesis is that these compound rather than compete: a debt legacy that narrowed the company's room to invest left it structurally worse placed to absorb the e-commerce shift and COVID when both arrived at once.

Boots

When Alliance Boots merged with the American pharmacy chain Walgreens in 2014, a full tax inversion — relocating the combined group's tax residence to Switzerland — was considered and explicitly rejected. Walgreens Boots Alliance is headquartered in Deerfield, Illinois. The 2014 merger should not be read as a tax-driven relocation; the Zug move happened separately, seven years earlier, under the 2007 buyout structure.

A figure of roughly £1.1–1.2bn of UK tax avoided over six years, largely attributed to the deductibility of debt interest, has circulated widely. It comes from a single source: a 2013/14 campaign report published jointly by War on Want, Unite the Union and Change to Win — campaigning organisations, not a parliamentary committee or tax authority. Alliance Boots publicly disputed the figure, and it was rebutted in print by Tim Worstall in Forbes, with the company's own defence separately reported in Tax Journal. A 2013 House of Commons Early Day Motion referenced the issue, but an EDM is a backbench statement of opinion, signed by MPs recording a view — not a finding of any kind, and not citable as one. The honest use of the £1.1–1.2bn figure is as a contested campaign estimate, presented alongside the dispute it generated, not as established fact.

Asda

Asda's net debt has been reported using different bases at different points. £4.2bn relates specifically to the 2022 financial year; reported net debt for both FY23 and FY24 was £3.8bn. £4.2bn should not be presented as Asda's current debt position.

The ownership chain runs through Bellis Holdco Limited, registered in Jersey, with a subsidiary layer including Bellis Phantom Holdco Ltd. This came to public attention through scrutiny by Parliament's Business and Trade Select Committee, in the course of which the Issa brothers subsequently acknowledged having given MPs inaccurate information about which entity was the ultimate parent. Asda and the Issa brothers have denied the Jersey structure was established for tax reasons; that denial stands alongside the committee's finding, not instead of it. Jersey holding companies are, as routine UK corporate practice, entirely lawful.

Separately, EG Group — co-owned by the Issa brothers — made unsecured loans of €39m in 2018 and a further $7m in 2022 to two Isle of Man-registered companies, Clear Sky 1 and Clear Sky 2, owned by the Issa brothers personally, funding the purchase and running costs of a Bombardier Global 6000 and a smaller aircraft. This was pursued in select committee questioning by Darren Jones, then chair of the Business and Trade Select Committee. EG Group has stated the loans were disclosed in its accounts and charged at commercial interest rates; that response stands alongside the fact of the loans, not as a rebuttal to them.

On refinancing: Asda's then CFO, Michael Gleeson, told the select committee — in evidence reported around December 2023 — that £500m of debt maturing in February 2024 would convert to a floating rate, adding "a minimum of £30m" to annual financing costs. A separate, much larger refinancing, covering £3.2bn of debt, took place in May 2024. These are two distinct events; a commonly quoted figure of £700m matches neither and should not be used.

Morrisons

The equity value, £7.0bn, is the purchase price. A separate figure of £6.6bn is sometimes quoted; that is the debt added to the business through the transaction, not the price CD&R paid, and the two should not be conflated.

Since the acquisition, Morrisons has sold and leased back property at scale: a £220m deal with ICG covering seven logistics properties, and the sale of 337 petrol forecourts to Motor Fuel Group for £2.5bn in 2024. Property-related transactions total roughly £3.2bn since CD&R took ownership.

Morrisons' competitive position has shifted markedly across the same period. Aldi overtook Morrisons to become the UK's fourth-largest grocer in the 12 weeks to September 2022, per Kantar (Aldi 9.3% market share, Morrisons 9.1%). Morrisons has since been overtaken by Lidl too, falling to sixth by 2025.

Thames Water

Macquarie's own published factsheet states Thames Water paid £2.8bn in dividends over the ownership period, with annual returns to investors of around 12%. Those figures come from Macquarie's own reporting of its own performance, not an independent audit, and should be read as the investor's stated account rather than a verified external finding.

On tax, the record is better sourced: the BBC reported that Thames Water paid no UK corporation tax for the 2013 financial year; other reporting puts the figure at £100,000 by the 2017 sale, with debt raised through a Cayman Islands-registered subsidiary, Thames Water Utilities Cayman Finance. Both the BBC and CNBC — mainstream financial and broadcast outlets, not campaigning organisations — carried this reporting.

Thames Water's current debt is reported at different figures depending on the month and what is counted — as low as £17.6bn on some measures, closer to £20bn on others. As of mid-2026, the higher figure is more commonly cited, though it moves monthly as refinancing talks continue, and Parliament has debated the risk of Thames Water entering a Special Administration Regime, per Hansard records from June and October 2026.

Both records belong in the same account: the debt rose sharply and the tax position is well documented, and the investor's defence — a doubled asset base, sustained investment-grade status, and over £11bn of network investment it says it supported — is a substantive answer that belongs next to the criticism, not after it.

Silentnight — a regulator's own finding

This is the safest ground in this piece: it rests on a regulator's own finding, reached through its own statutory process and published under its own name, rather than press reporting or a campaigning estimate. The Pensions Regulator does not describe its action as establishing wrongdoing beyond the specific pension liabilities it pursued and recovered.

Other cases

Maplin is worth pausing on, because it cuts against a simple version of this piece's own argument. It would be easy to reach for it as another private-equity casualty; the more accurate account is that the PE-owned period (Montagu, 2004–2014) ended without incident, and the collapse came four years later, under different owners, for reasons substantially about online competition and supplier credit terms rather than ownership structure. Attributing a company's failure to whichever owner is most recognisable is not analysis — it's a habit worth resisting, here and elsewhere in this piece.

The other side

None of the preceding sections should be read as a case against the leveraged buyout as a technique, and the industry's own defence of it deserves a proper hearing rather than a token paragraph.

The BVCA, the industry's UK trade body, also argues that a significant share of what press coverage labels "private equity" is in fact infrastructure or pension fund investment — a different kind of capital, with different return expectations and holding periods, routinely conflated with buyout private equity in public discussion. It points to the Walker Guidelines, governance and disclosure standards PE-backed firms have followed since 2007, as evidence the industry has moved to address transparency concerns rather than ignore them.

Academic research cited by the industry — from Nottingham University and Imperial College Business School — found PE-backed firms filed 40% more high-quality patent applications in the three years after investment than comparable firms without PE backing, and were more likely to survive financial restructuring as going concerns rather than being liquidated.

The honest concession is a real one: leverage can fund genuine growth, not just extraction. Many buyouts complete, trade steadily and exit without incident — those transactions don't make the news precisely because nothing dramatic happens, which means any account built from press coverage alone, this one included, is subject to survivorship bias in reverse: the failures are visible, the routine successes mostly aren't.

Why the directory works this way

Every structure described in this piece — the debt placed on the target rather than the buyer, the dividend recapitalisation, the sale-and-leaseback, the offshore holding company — is lawful, and lawful for good reason: capital has to be able to move to where it's needed, and leverage is one of the ordinary tools for doing that. Offshore holding structures in Jersey, Luxembourg and the Isle of Man are commonplace across UK corporate life generally, not a hallmark of any particular investor. Nothing in the six case studies above alleges that a named individual or firm broke the law; where a regulator or a parliamentary committee made a finding, it is reported here as that body's finding, with its date, and where a named party disputed a characterisation, that dispute sits next to the claim it answers.

That's exactly why Made Properly's directory rule isn't a verdict on the people who run private equity funds. It's a rule about structure, applied the same way regardless of who is involved: a firm whose owner has moved the risk of its own debt onto the company, or converted its freehold into rent it now has to find every year, is a different kind of business from a firm whose owner still carries that risk personally. The directory exists to record the second kind. That's the whole rule, and this piece is the evidence for why it's drawn where it is.

For the same evidence-tier system applied to how British food is labelled and regulated, see The Adulteration Files. To see the firms this rule keeps in — still independently owned, still carrying their own risk — see the directory.