Romney Wins, Private Equity Loses: Is PE Getting a Bum Rap?

Private equity is not inherently bad, but most of the time private equity is actually a euphemism for leveraged buy out. This is a particular type of private equity transaction, and it is the one that is usually the most profitable. It involves borrowing (often issuing debt in the form of "junk bonds" pioneered by Mr. Milken) in order to take a public company private by buying shares. Then, the new owner will either run the company with much higher leverage (leaving it far more susceptible to minor fluctuations in the underlying business), or sell off split the company up and sell off assets.
The private equity investors like this transaction because it requires so little equity on their part. It's another consequence of an easy credit environment.

Private Equity is Michael Milken's and Drexel Burnham legacy. It's nothing more than
more of the same less the extortion the earlier version guys used to get companies to
turn themselves over to the raiders. Mitt is a little smarter than Milken who ended up a
convicted felon in federal prison. Bain did nothing for America , just another rape job.

I am a Conservative and I vote ! I have a novel new twist for the 'TV news media'. Let's have a meeting between the candidates and the media with an live audience to ask the questions. Here is the kicker-- wire all the 'contestants' up to lie detectors before the questioning starts and have those lie detectors monitored by certified technicians. LET THE FUN BEGIN !

Chia Mitt

Mutt Rumney got a new debate coach but the Gekko wannabe is still a stiff, silver spoon elitist that is clueless. WIth Niki Haley's support Mutt got crushed in SC! Why? Mutt is NOT a conservative! He ran LEFT OF KENNEDY! Mutt has no vision, no ideas, no clue! Mutt Rumney is like John Sculley the Apple CEO that FIRED Steve Jobs! Rumney like Sculley FIRES the creative visionaries that change the world! Mutt does not get it! Mutt repeats the sound bite that he likes to FIRE people The problem is not his success, it is not greed but ENVY!?! OK! Mutt's daddy ran for President and Mutt has been running for 40 years. Mutt's dad paid 44% in taxes! Mut pays 14%! Mutt is the PROBLEM with the USA NOT the solution! Mutt the LBO king. What did he create? NADA! Many of the companies he acquired went bankrupt when he was through with them! Mutt wins. You lose! Not Mutt! Say it! NOT MUTT! Sounds right! NOT MUTT! Send The Cayman Chameleon back to NH!

Like all things nothing is perfect. There is a place for PE companies and they do contribute to society in general. Laws need to be changed so that the bad part of PE can be changed. A good discussion was on the Daily show with a Yale Law Professor Tues night, who defended PE companies. Right now it is to easy to take monies out of a company and bankrupt it. I am all for PE when it leads to economic growth, but not to moving money around and killing jobs just to make a profit.

Task...u read these comments? U are increasingly not worth the effort.

Liar and thief

every time I have heard the term qualified investor losses were forth coming

"I am a Conservative and I vote ! .." What does it mean? For example: Do you support the ban of the Gay marriages? If yes, how came the Government should be involved in peoples personal life? To be conservative is extremely controversial and illogical, just try to think about that!

The big issue with PE is whether the deal makers are able to take their compensation as capital gains or have to count it as ordinary income. It doesn't appear to me that the PE industry will whither and die if the deal makers have to pay the current top marginal rate on their income.

Tens of millions of dollars spent on negative tactics, millions of dollars will be required to proceed, for what? Resonant comments about how the miidle class can be saved! Is Mitt a middle class candidate? No. He has no class and tons of money to grandstand kooky conservative ideals and unrelenting filthy rich demagouges that feed him press. Makes Obama look like a good ole' boy, I choose Obama if it get's down to these two! NEXT!

I worked for a PE company once...two of them in fact. Never again.

Mr Kurtzman seems to feel strongly that PE is "overall quite positive for the economy". But he also says that net-net PE is not a job creator. Hmmm... so "positive" for whom?

More profitable - HAA!!! Net zero? Case study of how PE's (LBO's in a previous life) 'build companies' is Pacific Lumber on the northcoast of California.

The SOB's in private equity don't merit a 15% tax rate on their ill-gotten gains.

Huh? Whud U say? pirate ecstasy firms ? sounds interesting. where do I sign up ?

Let's see. Because nothing was said in this article. What a joke, but I should have expected this as it is Tech Ticker. Joel Kurtzman a Harvard man of course, just like the staff of Tech Ticker all Odumbocrap wanna bes and of course we all want Odumbocrap showing up at our business.

the wealthy of this country wil not win elections in this next decade they are looked upon like corporations all for them and GREED! SO ANSWER TO THIS QUESTION Romney will not win against Obama. Many congress people will also lose out for the next 3 elections until we sweep out the old and bring in the new that will listen to the people that are their bosses and we wnat change in the way this country moves onward and forward we wnast equality for all not just the wealthy we wnat and demand very good paying jobs so we can put away money for our retirement and and our children so they havea chance with thier children its not just about today its about the future of the people here and our country. the corporations ned to be regulated to ensure they move well and pay out well dont use the term its democracy thats not what it means and capitalism can and will die by this stupid thought process that companies can make all the money they wnant thats jnot right or correct soon they will lose out also, remember pigs get fat, HOGS GET SLAUGHTERED! AND THAT MEANS Gov will have to take over if companies dont drop the greed status and we will al be doing business by socialism as it was predicted, we will mpove to socialism by greed and commies move to capitalism, which will come full circle if they all cant live on just profits instead of greed. it is the truth we see what just happened in 2007/2008 all went belly up well they all should have had a nest egg with money there to keep going not default and thats why we need to regulate and look at the books, too many cheat lie steal and for thier own profits. not ours!

What is all of this hullabaloo about Private Equity being either good or bad for any business. It depends entirely on the integrity of the parties involved. Assume that you have a business that hasn't modernized as quickly as its competitors. Its market share is falling, costs are rising and it is being undercut by cheaper or higher quality competitors. Private equity dealmeisters can come in, clean the place up and restore it to health. Good deal. But... Same situation and dealmeisters discover that it has been totally hollowed out and that there's not enough to keep it going. So they sell off the viable pieces. Is that a bad deal? If it was failing and something of value is saved (jobs) that part is good. Had it been left to whither on the vine, everybody would have lost. That part would be bad. So it becomes a judgement call. Recognize though that some dealmeisters do suck out too much and also wipe out a firm. However, they get a bad reputation pretty quickly and then can't put together deals any more. So they end up going out of business. That too is good. You can't paint a business financing system as being good or bad, only the parties involved.