It's true that few topics have attracted greater attention from not only crusading journalists but serious academics than the impact of private equity ownership. "Plunderers" says its sweeping claims are supported by "decades of data" that provide unambiguous proof. But is this credible as a strategy for deploying trillions of dollars of capital? No way. Sure, you could find a few anecdotes in which an aggressive private equity firm successfully foisted an overleveraged company it had subjected to excessive cost-cutting onto an unsuspecting buyer. On its face, the idea that one could regularly flip unprofitable businesses drained of productive assets for spectacular gains just doesn't make sense. The biggest problem with the authors' full-throated attack on the sector is that the overarching narrative into which they try to stuff the facts is, well, incoherent.Īccording to the authors, private equity firms "buy companies and load them with debt while bleeding them of assets and profits," only to, within a few years, "sell these same companies off to new owners … at a substantial gain." The dramatic conclusions of Morgenson and her co-author Joshua Rosner, a managing partner at Graham Fisher, are on full display in the salacious title of their new book: " These Are the Plunderers: How Private Equity Runs - and Wrecks - America." Cherry-picked data and an incoherent narrative
The latest journalist to take a stab at examining the impact of the sector is Gretchen Morgenson, who won a Pulitzer Prize at The New York Times over 20 years ago for her Wall Street coverage. In 2022, and every year for the last five, over 100 hundred new such funds were raised - and more than 50 of these recent funds are greater than $10 billion in size. In 2002, 13 new funds larger than $1 billion were raised to scout for deals, and none were as big as $10 billion. The total assets under private equity management globally now exceeds $10 trillion. The economic and political influence of the private equity sector has exploded in the last 20 years.
The thoughts expressed are those of the writer. Knee, a Columbia professor who is a senior advisor at the investment bank Evercore, which does business with private equity, finds the authors' argument less than convincing.
0 kommentar(er)
