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Sucks but around the world legal and financial systems have been built to allow it, likely to benefit the powerful interests who are profiting right now. It’s a story as old as government itself, but the heights for the fall now are pretty scary.
Without meaning to rain on your eventual schadenfreude, I’m reminded that many of the Bernie Madoff‘s victims were elderly pensioners whose fund managers were greedy fucks and gladly jumped at the 20% gains without telling their customers it looks suspicious. Sadly, it doesn’t seem we’ve built many safeguards against that since 2008z
Adhiero-
The source of capital that has flowed into private equity has increasingly come from low risk investment vehicles that are divesting due to the collapse of interest rates. This has exposed pensions, retirement funds, mutuals etc. So yeah, schadenfreude might be a bit callous.
The pro argument is that PE can invest faster and more enthusiastically and drive gains through being nimble, cutting costs and achieving profitability in verticals that traditional investments can't penetrate i.e. direct-to- consumer retail, emerging tech and often a weird mix of the two.
My personal experience of PE is that they haven't got a fucking clue how to affect change and they spend the majority of their time trying to work out what other PE firms are doing, and investing in so they can copy them. They are all run by old boy Oxbridge chaps who have very limited experience in managing successful businesses themselves so tend to run a one-size-fits-all playbook.
The stench of their failings is so potent I'm convinced it's going to come crashing down at some point. solid chance I'm wrong though and PE will continue to be a slippery profit-making beastie.
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Ah, right. Yes I can see what you mean.
It's a new breed of "zombie" company that instead of being kept afloat by low interest rates, are being kept going by huge injections of private capital when they in all likelihood have no route to profit.
It's a pretty unjust situation for a trad business when a PE funded monster start up arrives in your area and buys your customers by offering services at significantly below cost, in order to make you go bust, and then take advantage of a monopolistic situation.
But it's an allegedly free market, so all it's all fine...
Whilst I agree that a big bust up in PE will have significant consequences for the wider economy, I won't be able to avoid a bit of schadenfreude if it does happen.