Nigel Doughty alarmed some of his loyal institutional investors this year when he tried to buy Nottingham Forest football club. They thought the chief executive of Europe's prime venture-capital partnership, Doughty Hanson, had finally flipped - not because Forest, twice European champions, were recently relegated from England's top football division, but because they feared Doughty had lost his hunger for business. Soccer clubs are seen as the toys that increasingly distract the UK's new rich from their day jobs.
"To be fair to Nigel, he would never treat Forest like a rich man's toy," says one person who knows him. "After all, he's supported them since he was in short trousers."
But there were good reasons to wonder whether, following a series of successful deals, Nigel Doughty and Richard Hanson might wish to quit while ahead. Over the past six or seven years, well funded and well organized financial investors such as Doughty Hanson could simply buy cheap in the private market, acquiring companies on multiples of six, seven or eight times annual earnings before interest, tax, depreciation and amortization (EBITDA), and sell at higher prices by later floating companies on booming public stock markets at multiples of 14 times EBITDA or more.