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Is this some sort of shell game? Is there some benefit from artificially creating these firms to hold the assets? As I can't think there is enough demand to ful
by Ekaros 10mo ago
Is this some sort of shell game? Is there some benefit from artificially creating these firms to hold the assets? As I can't think there is enough demand to fully staff that amount of firms with all the full-time workers it would need.
- y0eswddl 10mo agoAlmost certainly some kind of shell game - it seems many major PE companies own each other and smaller ones. I'd actually be very interested to see if anyone ever managed to break down who actually owns what
- financetechbro 10mo agoSo most PE firms probably have around 5-15 employees. They don’t require too much manpower unless they’re trying to close a lot of deals. The main tasks are sourcing the asset, conducting diligence, negotiating terms, and supporting the asset post investment. This can all be done with an analyst, an associate, a VP, and a Partner/MD, each focusing on things from networking/relationship building to making financial models and other adhoc work. I think PE just become a very popular way for wall street grads and MBA types to make a decent living without necessarily having to be a good investor (PE funds don’t present their full returns until 10+ after the fund has closed).