How Private Equity Ate Britain

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Just imagine how bad something has to be for Bloomberg to call it problematic

The worst thing is that private equity own children's care homes in the UK. They have local authorities over a barrel as local authorities have a legal duty to house and care for children who cannot be left with their families. PE is literally draining money out of local authority budgets while providing the worst, neglectful, minimal "service" in these care homes. Why is this not more widely publicised?

It’s sad. Private equity and Wall Street also ruined America because profit is more important than people and communities.

Literally everyone loses but the private equity companies and members. Also, it's funny how even in the US they are trying to change this because of how anti-competitive it can get.

I need at least $2m today to be considered 'wealthy' 20 years ago, the definition of wealth was nowhere near $2m, and in 20 years time, this amount may not be enough, however I do agree that one has to start somewhere, hence I now look to the stock market to fuel my goal

“How To Grow Money”

They need to regulate where the debt comes from and how much. How come when I buy a house I am stress tested for up to 7-8% rates but firms aren't?

I still don’t understand why transferring the debt into the acquired company is legal at all

Way past late stage capitalism. This is necrotic capitalism.

Private equity has to be the most evil thing I have learnt about in recent months

this seems like something that should be illegal. You should not be able to buy a business and then load it up with debt so the company has to carry the burden and the risk while you drive off into the sunset with all your money.

Private equity and supermarkets go back longer than Morrisons. Back in the late 1980s, Gateway was the third largest supermarket chain in the UK in terms of sales and actually largest in terms of square footage. Then in 1989 it was bought out by a private equity group known as Isosceles plc. It was loaded up with debt - around US$2.1 billion (probably the equivalent of US$5.5 billion today). Of course, it struggled to repay that debt. They later merged with Kwik Save and were eventually sold to the Co-op in 2008 for £1.5 billion

I thought Bloomberg loved private equity? You cheerlead for it every day on your shows and networks.

example: Manchester United :face-blue-smiling:

So buy a company at 100% value, borrow against it's "projected value" pay huge wages to single individuals, bankrupt, get a payout, walk away with the bank having the risk, but keeping the assets, i.e. the brand name, individual sectors, and physical assets, and the bank passes on their debt to their customers via inflating borrowing interests retroactively. The government then protects the bank with payouts to protect the customers. Fantastic. Money for nothing.

Usually Private Equity firms are on the lookout for businesses with low levels of debt and valuable physical assets that they can end up owning/controlling via an LBO (Leveraged Buyout) by promising the top management and ownership a lucrative amount to convince them to sell, then taking on a lot of debt to fund the purchase of their business (some of those proceeds go to payoff the current management), and finally stripping the business of its key assets and transferring the debt to the business.

The problem is leveraged buyouts. That came with higher interest payments saddled on the troubled businesses. Regulations need to stop this practice. PE can buy all they want but with their own debt

Finally I have understood why corporates have so much debt

Private? Wanna talk about the bureaucracy? Wanna talk about who denies the contraction of new houses?