How the private equity buyout industry works

July 3rd, 2009

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http://warongreed.org/facts.php Jeff Faux, author of The Global Class War, explains how the private equity buyout industry works, and how it hurts American workers and our economy.

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Comments to “How the private equity buyout industry works”

  1. Garnet Says:
    January 9th, 2009 at 16:16:39 Sounds like an unethical business.
  2. Moira Says:
    January 9th, 2009 at 16:39:38 check out the "bankingorbust" website for more info
  3. Avery Says:
    January 9th, 2009 at 17:02:37 What a load of crap!
  4. Gedeon Says:
    January 9th, 2009 at 17:25:36 Old guy in a suit does not =knowledgeable. PE funds charge THEIR investors fees, not the companies. PE not new (1980's). They do incredibly thorough research on co's they invest in. They normally do replace some management, execs that started the company but have no experience running a large corporation. On the other end, their investors are large state and federal pernsion funds. That means that PE funds are building teachers, firefighters, policemen, nurses, etc retirements. Not all bad.
  5. ZOLA Says:
    January 9th, 2009 at 17:48:35 this is exaclty what Cerebrus is doing with Chrysler they are slowy buying out workers as they will outsource car making to China
  6. LIRIENE Says:
    January 9th, 2009 at 18:11:34 "They take them all on tax payers money" What blatant lies!! These companies get their money fair and square from banks and other sources. Private Equity firms are stimulating business by trimming off any excess fat, that includes management and lower workers. Why should blue collar workers be exempt from cutbacks if they're costing too much? Management shouldn't be the only people fired. PE firms are fair about their cutbacks.
  7. VANNESS Says:
    January 9th, 2009 at 18:34:33 I was employed by a company that was engaged in these negative actions. It has recently been taken over by a private equity group of which the major players in the company are still a part of. They are a bunch of greedy bastards that are running this country into a financial crisis of monumental proportions while they line their pockets and laugh all the way to the bank. Hedge funds and private equity groups will cause the ultimate financial crisis for the US.
  8. Muire Says:
    January 9th, 2009 at 18:57:32 Most private equity fund managers raise money and invest it in new or growing businesses. Let's say you have a business idea that is solid, but you don't have enough money. Then you can go to a PE firm, and if they like your idea they will invest in return for a share of your company. Running in or investing in a PE fund can be very profitable, but you also risk loosing a lot of money if you bet on the wrong entrepreneurs.
  9. Lillie Says:
    January 9th, 2009 at 19:20:31 why dont you explain what they do then, if your a expert on the subject, im sure the other posters would like to know too...
  10. Murdock Says:
    January 9th, 2009 at 19:43:30 This guy doesn't know what he is talking about. Either he doesn't understand what private equity firms do, or he is telling lies. If you want to criticize private equity, then first understand it. Also, ask yourself who is profiting the most from private equity. Is it the fund manager or someone else? Find out...Then criticize...
  11. MAFUANE Says:
    January 9th, 2009 at 20:06:29 Private equity is crooked business, thieves, pirates. No wonder for years I have worked from company to company as a temp. Lock them all up!!!!!!!!!!!!!!!!!! along with Congress!
  12. Garrey Says:
    January 9th, 2009 at 20:29:28 LOL. KKR bought out RJRT in the 80's. The company fell to No2 behind PM and continues to fall in sales due to the debt and poor management KKR put in place.
  13. Len Says:
    January 9th, 2009 at 20:52:27 All of these make the economy of our country weaker, destroying economic growth and productivity. You would be lucky to ever see a dime in your retirement if your pension manager ever invested in private equity funds!
  14. Beverley Says:
    January 9th, 2009 at 21:15:26 a) Increase unnecessary expenses and outsource processes that would be cheaper to do in-house. b) Bring in high quality management who specializes in stripping down the business for capital gains tax incentives. c) Private equity professionals have deep knowledge of the investors, bankers, lobbyist, politicians, and the law that they need to beg, borrow, bribe and scam. d) Fired workers are left to fend for themselves, can not meet mortgage payments, and are often forced into bankruptcy.
  15. TLACAELEL Says:
    January 9th, 2009 at 21:38:25 Private equity companies: a) reduce unnecessary expenses b) bring in high quality management to grow the business and run it more efficiently c) private equity professionals have deep knowledge of the sector they invest in d) fired workers retrain and gain the skills that the economy really needs All of these make the economy of the country healthier, stimulates economic growth and productivity. Our pensions are managed by pension funds which invest in private equity funds!
  16. ANDREW Says:
    January 9th, 2009 at 22:01:24 Private equity companies: a) reduce unnecessary expenses b) bring in high quality management to grow the business and run it more efficiently c) private equity professionals have deep knowledge of the sector they invest in d) fired workers retrain and gain the skills that the economy really needs All of these make the economy of the country healthier, stimulates economic growth and productivity. Our pensions are managed by pension funds which invest in private equity funds!
  17. Len Says:
    January 9th, 2009 at 22:24:23 By the way "MuslimGhost"...I just hope you live somewhere where hate speech is penalized under law.
  18. Gardner Says:
    January 9th, 2009 at 22:47:22 While Mr. Faux's presentation is somewhat unfair to the greater number of private equity firms that do provide needed capital and management expertise, he does accurately describe the low road activities of the very largest private equity firms, who continue to major in buying cash cows and not updating their assets. They treat a profitable company like it were a car to be driven without an oil change ever. Having stripped the assets they then dump it on the public markets. It happens.
  19. MARNIN Says:
    January 9th, 2009 at 23:10:21 If a companies going to the wall anyway, what's the point in maintaining it without change just for the sake of it. Slimming it down, selling underperforming assets and laying off some of the workforce may be necessary to save it. When the company goes bust, don'll all the workforce get laid off anyway?
  20. Cristy Says:
    January 10th, 2009 at 23:33:20 This is the most ignorant and biased thing I've ever heard. For one, the whole concept of the private equity is shown wrong...he has no idea what he is talking about. Check any data about the private equity industry and you will see that the companies that were invested in by private equity firms have grown more than other companies...meaning to say that they hired more people in the long run.
  21. BREUSE Says:
    January 10th, 2009 at 23:56:19 "The genius of the Jew is to live off people, not off land, nor off the production of commodities from raw materials, but off people. Let other people till the soil; the Jew, if he can, will live off the tiller. Let other people toil at trades and manufacture; the Jew will exploit the fruits of their work. That is his particular genius." Henry Ford
  22. Nimue Says:
    January 10th, 2009 at 00:19:18 This is a generalized opinion that is not representative of the private equity community, in America or globally. Ignorance at its best.
  23. Avrill Says:
    January 10th, 2009 at 00:42:17 Only in America :/
  24. BOOTH Says:
    January 10th, 2009 at 01:05:16 GO AFTER CREDIT CARD COMPANIES!! I'll help... E-mail me bravenewfilms...
  25. Conchobar Says:
    January 10th, 2009 at 01:28:15 ChristianSocialist, by your language you seem to have deep resentment about the wealth of the wealthy, and yet are envious too. Who is wealthy in your eyes? So, perhaps you should start with yourself, and begin by sharing what you have first. Just think, you could lead by example, just as Christ did.

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