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Private equity firms seem like the villains many imagine investment bankers to be. Like, actually cracking the bones and sucking the marrow of the little guys i
by PessimalDecimal 1y ago
Private equity firms seem like the villains many imagine investment bankers to be. Like, actually cracking the bones and sucking the marrow of the little guys in small businesses. Discharging pension obligations, offshoring, cutting corners.
But maybe that's an unfair point of view. Is there a steelman case to be made for PE?
I listened to https://freakonomics.com/podcast/are-private-equity-firms-plundering-the-u-s-economy/ https://freakonomics.com/podcast/are-private-equity-firms-pl... but didn't come away with a rosier view of them.
- nradov 1y agoThere are so many PE firms with such different practices that's it's difficult to make any generalized case for or against them. Ideally they provide liquidity for small business owners who want to sell and move on but lack other buyers. PE firms also do rescue many businesses that would have otherwise failed due to incompetent management or lack of capital: the mainstream press loves to hype up failures and abuses but seldom reports on successes. Defined benefit pension plans shouldn't be a thing in the first place: they're too risky for workers, employers, and taxpayers alike. All pensions should be replaced with defined contribution plans like 401(k) where assets are safely held in individual named accounts.