Global Investor The Puzzle Of Private Equity
Modern capitalism is a study in contrasts. On the one hand, it’s dominated by massive enterprises that tend to become high-cost bureaucracies. On the other hand, these giant firms are increasingly policed by activist shareholders—including private-equity firms—that focus single-mindedly on profits. To its champions, private equity forces companies to cut costs and improve efficiency; profits are deserved. To critics, profits flow mainly from loading companies up with debt; private equity is a sophisticated swindle that often cheats ordinary shareholders....