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Is private equity good for the economy? Is private equity good for the economy?
Private equity leads to higher default rates and more bankruptcies and worse outcomes for customers and workers Private equity leads to higher default rates and more bankruptcies and worse outcomes for customers and workers
Private equity leads to more economic growth and imporovements in efficiency Private equity leads to more economic growth and imporovements in efficiency
Private equity may help investors in its funds, but at the expense of workers, customers and the economy Private equity may help investors in its funds, but at the expense of workers, customers and the economy
Private equity is a debt driven model Private equity is a debt driven model
Defaults for private equity (leveraged buyouts) can be 10x higher than for non-LBO firms Defaults for private equity (leveraged buyouts) can be 10x higher than for non-LBO firms
Private equity is behind most recent big retail bankruptcies Private equity is behind most recent big retail bankruptcies
Customer care deteriorates when private equity buys companies Customer care deteriorates when private equity buys companies
Most claims of growth by private equity are false Most claims of growth by private equity are false
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Is private equity good for the economy?
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Private equity leads to higher default rates and more bankruptcies and worse outcomes for customers and workers

(1 of 3)

Private equity is behind most recent big retail bankruptcies

Most big bankruptcies recently are due to private equity.
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The Argument

Private equity groups have been behind most of the recent bankruptcies in local newspapers, retail, and grocery stores. In fact, analysis by FTI Consulting found that two thirds of the retailers that filed for Chapter 11 in 2016 and 2017 were leveraged buyouts. The pirate equity groups load debt onto the companies and dividend out the cash to themselves, which often leads to bankruptcy and a trail of job losses and underfunded pensions. Heads they win, tails the company, employees, and suppliers lose.

Counter arguments

Premises

Rejecting the premises

References

In the Wild

This page was last edited on Thursday, 27 Feb 2020 at 14:54 UTC

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