Sinking funds
Turd of the Week , Issue 1649 SEVERAL readers sent in the same nomination for the Eye's Turd of the Week. Step forward, Ben Way, group head of Macquarie Asset Management, who recently told investors Thames Water had improved under its ownership.

"We're actually proud, very proud of our ownership of Thames Water," Way said on a group call. "It was a much better business, imperfect, but much better business after our stewardship, and we can't talk about what happened subsequently."

Thames Water's 16m customers might recall that Macquarie sold the company in 2017 after loading it with debt. The Australian investment bank had taken on debt of £3.4bn on acquisition in 2006, which rose to £10.8bn by the time it sold its final stake. During that period, investors received dividends worth almost £3bn.

Barely afloat
The troubled water utility is now on the verge of financial collapse, with debts of nearly £20bn, and last month it had to win court approval for £3bn in emergency funding. But Way denied that Macquarie bore any responsibility for the company's fate since his bank's ownership, comparing the situation to a homeowner being blamed for a roof leak seven years after selling up.

Besides its financial woes, Thames Water has been heavily criticised for polluting waterways and damaging the environment (Eyes passim). Between 2020 and last year, it discharged 72bn litres of sewage into the Thames.

Beware buyer
Thames Water has now chosen US private equity firm KKR as its "preferred partner" to buy it. KKR was the subject of Barbarians at the Gate, a renowned 1989 book about corporate greed that covered its leveraged buyout of a tobacco company.

At least the deal with one of the world's largest private equity firms will require regulatory approval from Ofwat. The regulator is chaired by Iain Coucher, whose other roles include senior adviser at HIG Capital – a leading private equity firm.

So Ofwat (and its private equity man) will be tasked with deciding whether private equity ownership is right for the UK's largest water company. What could go wrong?