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PE exists because the cases you hear about are the failures. It would be like looking at the products of Google that never made money and then wondering how Goo
by govg 3y ago
PE exists because the cases you hear about are the failures. It would be like looking at the products of Google that never made money and then wondering how Google runs, you're not looking at the full picture. For every failure story like this, there are numerous other firms where PE has come up, removed a bunch of inefficiencies, driven up profits, and then moved on. It is just a more involved form of VC investing, and in that world failures are even more common.
- dpflan 3y agoSure, PE is bigger than this. But isn’t the issue people are having is that this “failure” isn’t a failure (PE gains something)…it’s part of doing business as a PE firm?
- jacobr1 3y agoOne of many different models for PE firms. Yes it is a tactic used by some firms, but not all. There really are a variety of PE approaches. This article lists some of them: https://www.skynova.com/learn/business/the-9-types-of-private-equity-simply-explained https://www.skynova.com/learn/business/the-9-types-of-privat... The shady tactics end more commonly as part of the LBO or Distressed style firms.
- dpflan 3y agoThanks for the article.