- Question
Is private equity good for the economy?
Private equity firms have been called "locusts" by the German chancellor Angela Merkel but proponents argue that private equity investors make companies more efficient, create economic growth and provide good economic returns to investors.
Position 1 of 3
Read this position →Private equity leads to higher default rates and more bankruptcies and worse outcomes for customers and workers
Private equity is a misnomer and should properly be called leveraged buyouts. Leveraged buyouts, by definition, increase borrowing and raise the probability of bankruptcy.
Position 2 of 3
Read this position →Private equity leads to more economic growth and imporovements in efficiency
Private equity leads to superior corporate management and greater efficiency. Companies that are owned by private equity firms grow and help the economy.
Position 3 of 3
Read this position →Private equity may help investors in its funds, but at the expense of workers, customers and the economy
Private equity may be a good investment for those investing in the private equity funds, but it is bad for customers, suppliers and the economy at large.