Comment by elzbardico
5 hours ago
This book got a unfortunate title. Private Equity can be a completely legitimate activity. What it needs is some regulation on some underhanded financial tatics it uses, such as LBO.
5 hours ago
This book got a unfortunate title. Private Equity can be a completely legitimate activity. What it needs is some regulation on some underhanded financial tatics it uses, such as LBO.
Hilton is a good example, right?
But vast majority of the time it’s bad?
The vast majority of the time, you don't hear about it at all. Leveraged buyouts and the monopolistic strategies like buying out all the private doctors or veterinarians in a region get all the negative press but they're a tiny fraction of private equity.
The big money is in really boring industries like mining/oil/resource extraction, power plants, infrastructure, construction, and other industries that are predictable and in high demand everywhere. PE firms often get the best deals because they thrive on those kinds of connections and can offer up large amounts of capital on favorable terms in exchange for first dibs. The "rich get richer" is their primary strategy and it works without minmaxing exploitation.