3 ms·
The general rule of thumb with PE(not so true maybe in the last 2-3 years) is that if PE starts showing up en masse to your industry your industry is either hal
by mamonster 4y ago
The general rule of thumb with PE(not so true maybe in the last 2-3 years) is that if PE starts showing up en masse to your industry your industry is either half alive and needs an emergency operation that might kill it or it has a lot of excess fat that is obvious by looking at the balance sheet.
Not one of the ones he listed (retail, healthcare, defense) are industries where people would look and say "this is working well, fuck PE for fucking it up".
Tech and software buyouts by PE only really started happening within the last 5 years, so can't make a judgement on that yet.
- missedthecue 4y agoVista Equity is 22 years old
- mamonster 4y agoSure but Vista is the exception to the rule. If I told you "algo hedge funds only really took off(on AUM Basis) after 2008" you wouldn't answer that with "Yeah but Rentec exists since 1982" or "D E Shaw exists since 1988".
- panzagl 4y agoI assume PE is responsible for the mess in government contracting- the small companies that get shit done are snapped up by larger firms that then do nothing except lobby and hire former officials. To some extent it had always been that way, but now instead of it being a big contractor (say Lockheed or Northrop) preying on a few smaller companies, it's outsiders like KBR buying everyone.
- htrp 4y agoKBR is not a PE shop.... KKR is (but not sure of KKR is big in govt contracting)
- hcmacro 4y agoYou're right. I looked at the examples he linked and instead said "this isn't working well, f** PE for making it worse." https://www.buzzfeednews.com/article/kendalltaggart/kkr-brightspring-disability-private-equity-abuse https://www.buzzfeednews.com/article/kendalltaggart/kkr-brig...
- connor11528 4y ago> Tech and software buyouts by PE only really started happening within the last 5 years, so can't make a judgement on that yet. Might be an isolated case but worth mentioning the Solarwinds hack of America's nuclear industry could have been a result of PE ownership: https://www.scmagazine.com/news/supply-chain/solarwinds-lawsuit-claims-private-equity-owners-sacrificed-cybersecurity-to-boost-short-term-profits https://www.scmagazine.com/news/supply-chain/solarwinds-laws...
- TheCoelacanth 4y agoIsn't Dodd-Frank making it much less attractive for companies to go public also a factor in the rise of PE?