Private equity and the concept of brittle trust

This paper focuses on private equity in the UK and is set in the context of debates about transformations in the City of London. The article focuses on a particular concept of trust as expressed by senior members of the private equity sector. The argument developed is based on interviews with five senior founding partners of private equity firms who talked to us about their background and education, their understanding of how private equity worked and the basis for successful money making and their relationships with those inside and outside the organization. All interviewees strongly asserted the need for absolute trust between senior partners as an essential condition for the successful operation of their business. At the same time, their description of trust in this context was that while it is deep, it is also easily broken, and that once broken, the breach cannot be forgiven. We call this 'brittle trust': asserted to be simultaneously strong while extremely fragile. The paper argues, drawing on Diego Gambetta's work on the Sicilian Mafia, that this concept of 'trust' reflects a particular understanding of the practice of private equity as a high risk, tough and unforgiving business that nevertheless requires high standards of personal integrity. The study allows us to understand something more about the social ideals that were built into this financial sector by its founders, which we argue formed a crucial part of the transformation of the financial sector. © 2012 The Authors. The Sociological Review © 2012 The Editorial Board of The Sociological Review.