KKR - KKR & Co. Inc.

NYSE - NYSE Delayed Price. Currency in USD
28.13
+0.08 (+0.29%)
At close: 4:00PM EDT
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Previous Close28.05
Open28.60
Bid28.18 x 1200
Ask28.19 x 900
Day's Range28.02 - 28.69
52 Week Range18.30 - 28.73
Volume3,562,504
Avg. Volume3,015,820
Market Cap23.702B
Beta (3Y Monthly)1.70
PE Ratio (TTM)10.36
EPS (TTM)2.72
Earnings DateOct 23, 2019 - Oct 28, 2019
Forward Dividend & Yield0.50 (1.78%)
Ex-Dividend Date2019-08-02
1y Target Est31.69
Trade prices are not sourced from all markets
  • Bloomberg

    KKR Is Said to Consider Sale of Locomotive Leasing Business ELL

    (Bloomberg) -- KKR & Co. is considering a sale of its Austrian and German locomotive leasing business, ELL GmbH, people familiar with the matter said.The buyout firm is in early discussions with potential advisers as it reviews its holding, the people said, asking not to be identified because the deliberations are private. ELL could fetch a valuation of more than 1 billion euros ($1.1 billion) including debt, the people said.KKR has been an investor in ELL through its global infrastructure fund since 2014. The company acquires locomotives and leases them to the European railway industry across continental Europe.Any sale would add to the $156 billion of private equity deals in Europe this year, according to data compiled by Bloomberg. A representative for KKR declined to comment.KKR has also been considering an exit from British scientific measurement and testing company LGC Group, which could fetch more than $2 billion including debt, Bloomberg News has reported. The sale has attracted initial interest from suitors including Thermo Fisher Scientific Inc., Danaher Corp., Blackstone Group Inc. and Carlyle Group LP, people with knowledge of the matter said this month. To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Sarah Syed in London at ssyed35@bloomberg.netTo contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Ben Scent, Neil CallananFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Business Wire

    KKR Makes Major Investment in Leading Labor Market Analytics Provider Burning Glass

    KKR, a leading global investment firm, and Burning Glass Technologies, the world’s leading real-time labor market data source, today announced that KKR has completed the acquisition of a majority stake in Burning Glass from Providence Strategic Growth. The investment is part of KKR’s Global Impact strategy, which is focused on identifying and investing behind companies whose core business models provide commercial solutions that contribute measurable progress toward one or more of the United Nations Sustainable Development Goals (SDGs).

  • Reuters

    REFILE-KKR to list its first investment vehicle in Australia in November -sources

    KKR & Co Inc is preparing to list a A$500 million credit fund in November in Australia, marking the U.S. buyout firm's first investment vehicle in the country, two people with direct knowledge of the matter told Reuters. The KKR Credit Income Fund is aimed at investor demand for higher-yielding products amid falling global interest rates, offering target annual dividend payments of 4% to 6%, the people said, declining to identified because they were not allowed to speak with media. A KKR spokeswoman declined to comment on plans to list a credit fund on the Australian Securities Exchange, but said the firm was watching the "interesting space".

  • Bloomberg

    Ex-BTIG Analysts Start Their Own Firm and Snag KKR as Client

    (Bloomberg) -- A group of well-known analysts are starting their own research firm covering technology, media and telecom -- and they already have a big-name client: KKR & Co.The new firm, called LightShed Partners, will offer subscribers research on public and private companies. It was co-founded by analysts formerly at BTIG LLC, including Richard Greenfield, Walter Piecyk, Brandon Ross, Joseph Galone and Mark Kelley.The firm formed a strategic relationship with KKR, the private equity giant and longtime investor in telecom, media and technology companies. KKR will work with LightShed’s founders as they build a research platform.Greenfield is probably the best known of the group, thanks to his social-media persona and willingness to challenge media giants. He refers to himself as a “media futurist” and has long been critical of Walt Disney Co.Disney Chief Executive Officer Bob Iger has blocked him on Twitter and the company won’t take his questions during earnings calls, according to Greenfield.Greenfield often posts photos and videos of himself waiting to ask a question during company calls with analysts. He has also attempted to coin hashtags about the future of media, including “goodluckbundle” and “goodlucktv.”Piecyk said the new firm will be unique because the analysts won’t be afraid to issue sell ratings on stocks and ask hard questions on earnings calls while some of their peers are “more interested in saying, ‘Great quarter.’”The analysts declined to disclose the price of a subscription to their research, but said it would be tailored for institutional investors. They said they expect to create a media business over time, including starting their own podcasts.They said they won’t be investing in public companies, but would look to invest in private companies.“We’ve done private investing individually in the past and hope to figure out a way to formalize that,” Greenfield said.The firm will be working with KKR on “interesting events and corporate activities,” Greenfield added.“For us, this is about supporting entrepreneurs and independent thinkers in the areas of technology, media and communications,” Ted Oberwager, director of KKR’s TMT investing team, said in a statement.(Updates with LightShed comments starting in seventh paragraph.)\--With assistance from Lucas Shaw.To contact the reporter on this story: Gerry Smith in New York at gsmith233@bloomberg.netTo contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob GolumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Global investment firm buys Roswell industrial buildings for just over $26 million
    American City Business Journals

    Global investment firm buys Roswell industrial buildings for just over $26 million

    The 16 acre property stands along Old Roswell Road in an area of low-rise industrial and office space that is filling in with new housing

  • Reuters

    UPDATE 1-PropertyGuru plans Australia IPO, potentially biggest of year -sources

    SYDNEY/SINGAPORE, Sept 10 (Reuters) - Southeast Asian online realtor PropertyGuru Group, whose backers include buyout firms TPG Capital and KKR, is planning an Australian IPO that could raise up to A$400 million ($275 million) this year, sources with knowledge of the deal said. It would be the country's largest offering this year after Fineos, an Irish insurance software firm, listed in Australia last month after a A$190 million IPO, Refinitiv data showed.

  • Kravis, Lutnick, Paulson Cheer as Nadal Wins 19th Grand Slam
    Bloomberg

    Kravis, Lutnick, Paulson Cheer as Nadal Wins 19th Grand Slam

    (Bloomberg) -- Henry Kravis punched the air with his fists when Rafael Nadal both broke and held serve in the decisive fifth set of the U.S. Open Men’s Final.Kravis was watching just steps from the court with KKR colleagues Joe Bae, Pete Stavros and Tagar Olson as Nadal defeated Daniil Medvedev Sunday in an epic 5-hour match to win his 19th Grand Slam. Also sitting court side, in arguably the best seats in Arthur Ashe stadium, were Bill Ackman, Ralph Lauren and Howard Lutnick.Read more: Nadal moves within one of Federer on all-time slams listLutnick was in a suite with Carl Icahn and Eminence Capital’s Ricky Sandler on Friday night, and with his sons on Sunday. Wearing a charcoal gray hoodie and jeans, Lutnick shared his first memories of the U.S. Open, when the tournament was still held at Forest Hills before moving to Flushing Meadows in 1978.“We didn’t really have money for tickets, so me and my little brother would wait outside,” he recalled. “I knew all the names of all the players so in the early rounds, I would find players who were way down in the list and we’d go running up to them and get their autograph."“They’d ask ‘Are you going to come in and root for us?’ and we’d say ‘Sorry, we don’t have any tickets.’ So they’d say ‘Hold on,’ go inside, come back and give us a couple,” said Lutnick, who recalled watching such past champions as John McEnroe and Bjorn Borg and his friend, Dick Stockton.Sitting ahead of the KKR contingent in the front row was hedge fund manager John Paulson and behind him, Michael Tennenbaum, the former Bear Stearns executive who authored a book titled “Risk: Living on the Edge.”Like Lutnick, Tennenbaum experienced his first US Open at Forest Hills. “You’d see the tennis champs going back on the subway, like Roscoe Tanner,” said Tennenbaum, dressed in a navy t-shirt, colorful striped pants and bold red shoes to match his eye-glasses.Nadal was presented his $3.85 million prize money check by Jennifer Piepszak, JPMorgan’s CFO.The usual contingent of Hollywood actors were also sprinkled throughout the crowd, including Michael Douglas, Catherine Zeta Jones and Mariska Hargitay.Financiers including Stephen Schwarzman and Kip DeVeer, as well as the Duchess of Sussex Meghan Markle, showed up for Saturday’s women’s final. It was won by 19-year-old Bianca Andreescu, who upset crowd favorite Serena Williams 6-3, 7-5 to become the first Canadian to win a Grand Slam title.“I was sad to see Serena lose, but she did come back like a champion from down 5-1" in the second set, said BentallGreenOak’s Sonny Kalsi.After the women’s final, guests including Olivia Flatto, Robert Wolf and Marathon’s Bruce Richards dined on burrata and beef tenderloin at the International Tennis Hall of Fame’s Legends Ball honoring Rod Laver. Co-chairs of the event at Cipriani 42nd Street included Jody and John Arnhold, Andrea and Erik Lisher, Judy and Russ Fradin, Fred Luddy, Debbie and Ajay Nagpal, Rob Pohly and Barbara and Gary Tolman.\--With assistance from Amanda Gordon and Erik Schatzker.To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.netTo contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steven CrabillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Saudi Shares Fall Second Day, With Banks Pressuring: Inside EM
    Bloomberg

    Saudi Shares Fall Second Day, With Banks Pressuring: Inside EM

    (Bloomberg) -- Saudi Arabia’s equity index ended lower for a second day, after spending much of the trading session in the green, as investors assessed changes in the top position within the country’s energy ministry.Over the weekend, the Saudi king named his son as energy minister replacing Khalid al-Falih, who had been the face of OPEC diplomacy over the past three years. The new minister, Prince Abdulaziz bin Salman, is half-brother to the Crown Prince Mohammed bin Salman and has served in the energy ministry for decades, most recently as state minister for energy affairs. He is seen as a capable and experienced technocrat.While the reshuffle is seen as having little direct impact on the Saudi market, investors have been shying away from some expensive stocks in Riyadh, said Marwan Haddad, senior portfolio manager at Emirates NBD Asset Management, in an interview to Bloomberg Television.Petrochmical’s giant Saudi Basic Industries Corp. is trading near the highest valuation in over a decade while projected earnings per share fall to the lowest since May 2016.MIDDLE EASTERN MARKETS:Saudi Arabia’s Tadawul All Share Index shed 0.1%, after rising as much as 0.6% earlierThe Tadawul Banks Index fell 0.4%, with six of its 11 members declining Haddad, from Emirates NBD Asset Management, highlights buying opportunities in the United Arab Emirates and in EgyptSectors he’s bullish on include healthcare, transportation and logistics Gauges in Dubai, Abu Dhabi, Bahrain, Kuwait, Oman lost between 0.2% and 0.8% In Dubai, Emirates NBD sank as much as 3.6%READ: Emirates NBD Close to Hiring Banks for $2 Billion Rights Issue In Israel, the TA-35 advanced 0.7% as of 3:19 p.m. local time, boosted by pharmaceutical companiesPerrigo +4.9%; Teva Pharmaceutical +2.2%READ, on Sept. 6: KKR’s Arbor, Teva Drop Patent Suit on Copies of Head-Lice LotionMORE: Kuwait’s CMA to Start Stake Sale of Bourse to Local Investors\--With assistance from Yousef Gamal El-Din, Manus Cranny and Dana El Baltaji.To contact the reporter on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.netTo contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, James Cone, Stephen KirklandFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Reuters

    US loan investors eye quality as pipeline grows

    What a difference a year makes. Loans backing US leveraged buyouts (LBOs), including a US$500m term loan for the Carlyle Group’s acquisition of ship repair services company Vigor Industrial and a US$755m first-lien loan supporting Thoma Bravo’s purchase of data provider J.D. Power Associates, are expected to garner demand throughout September, among other debt financings. This month, US investors have instead set sights on smaller-sized, but higher-quality leveraged loans from recognizable sponsors and borrowers.

  • Reuters

    Thermo Fisher, Danaher among firms competing for KKR's LGC Group - Bloomberg

    Medical device makers Thermo Fisher Scientific Inc and Danaher Corp have expressed interest in KKR & Co's potential sale of its scientific measurement and testing company LGC Group, Bloomberg reported on Friday. The sale of LGC could get the private equity firm more than $2 billion, including debt, the report said, citing people familiar with the matter. Blackstone Group Inc, Carlyle Group LP, CVC Capital Partners and EQT Partners are also weighing offers for the business, according to the report, which added that the talks are at an early stage.

  • Thermo Fisher, Danaher Among Firms Eyeing KKR's LGC
    Bloomberg

    Thermo Fisher, Danaher Among Firms Eyeing KKR's LGC

    (Bloomberg) -- KKR & Co.’s potential sale of British scientific measurement and testing company LGC Group has attracted initial interest from suitors including Thermo Fisher Scientific Inc. and Danaher Corp., people familiar with the matter said.Blackstone Group Inc., Carlyle Group LP, CVC Capital Partners and EQT Partners are also weighing offers for the business, the people said, asking not to be identified because the deliberations are private. LGC could fetch more than $2 billion including debt in a sale, the people said.Suitors expect KKR to send out a so-called information memorandum later this month with preliminary information on the business, the people said.LGC helps test whether foods contain allergens or if racing greyhounds have been doping. The company generates annual earnings before interest, taxes, depreciation and amortization of about $150 million after factoring in its recent acquisitions, the people said.Deliberations are at an early stage, and there’s no certainty the suitors will proceed with firm bids, the people said. Representatives for Blackstone, CVC, EQT, KKR and Thermo Fisher declined to comment. A spokeswoman for Carlyle said she couldn’t immediately comment, while representatives for Danaher didn’t respond to requests for comment.KKR is working with advisers as it looks for ways to exit its holding in the business, which it bought in 2016, people familiar with the process said previously. The company has made a number of acquisitions since the buyout firm’s investment.In August, LGC bought a majority stake in Toronto Research Chemicals, a firm that makes chemicals used in reference standards and research. That deal followed its September 2018 acquisition of reagents maker Berry & Associates.LGC traces its origins to 1842 to a body created in London to regulate tobacco adulteration. It still provides independent chemical and bioanalytical measurements. Previously known as Laboratory of the Government Chemist, the firm was privatized in 1996.\--With assistance from Kristen V. Brown.To contact the reporters on this story: Sarah Syed in London at ssyed35@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.netTo contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Amy Thomson, Ben ScentFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Reuters

    Mobile marketing firm AppLovin invests in game studios

    AppLovin Corp, the U.S. mobile marketing firm backed by private equity firm KKR & Co Inc, said on Thursday it has invested in several gaming studios, as it adds to its library of games ahead of a potential initial public offering. Palo Alto, California-based AppLovin said it has acquired a stake in Belarusian game studio Belka Games, which is the creator of mobile puzzle game Clockmaker. AppLovin also disclosed investments in PeopleFun and Firecraft Studios, the latter of which developed mobile game Matchington Mansion which has been rated more than 1 million times on the Google Play Store.

  • Reuters

    UPDATE 1-KKR to sell or float German defence supplier Hensoldt - sources

    FRANKFURT/BERLIN, Sept 5 (Reuters) - Private equity firm KKR is preparing for a stock market flotation or sale of German defence supplier Hensoldt in a potential 2 billion euro ($2.2 billion) deal, people close to the matter said. The buyout group has in recent weeks listened to bankers present options for exiting its investment, including a listing of 20-30% on the stock exchange or a sale to a defence group or private equity business next year, they said, adding KKR was expected to hire an adviser soon to help arrange a deal. KKR declined to comment.

  • Reuters

    KKR to start preparations for IPO or sale of defence supplier Hensoldt -sources

    FRANKFURT/BERLIN, Sept 5 (Reuters) - Private equity firm KKR is initiating preparations for a stock market flotation or sale of German defence supplier Hensoldt in a potential 2 billion euro ($2.2 billion) deal, people close to the matter said. The buyout group has in recent weeks listened to bankers present exit options, including a listing of 20-30% on the stock exchange or a sale to a defence group or private equity investor next year, they said, adding that KKR is expected to soon mandate an advisor to help organise the deal. KKR declined to comment.

  • StubHub Draws Interest From Vivid Seats and KKR
    Bloomberg

    StubHub Draws Interest From Vivid Seats and KKR

    (Bloomberg) -- StubHub, the ticket marketplace EBay Inc. is selling, has drawn interest from suitors including rival Vivid Seats LLC and buyout firm KKR & Co., according to people familiar with the matter.Silver Lake is weighing a bid for StubHub, which could fetch about $3 billion, said the people, who asked to not be identified because the matter isn’t public. The sale process has begun in recent weeks, they said. No decision has been made and the suitors may opt to not proceed with offers, they said.EBay in March announced a strategic review of assets including StubHub and its Classifieds Group in conjunction with a settlement agreement with activist investors Starboard Value and Elliott Management Corp., which had called for the sale or spinoff of those two divisions. EBay hasn’t yet decided if or when to proceed with a sale process for the Classifieds business, the people said.Representatives for EBay, KKR and Vivid Seats declined to comment. A representative for Silver Lake didn’t respond to requests for comment. Chicago-based Vivid Seats is backed by the private equity firms GTCR and Vista Equity Partners.EBay fell 1.4% to close at $39.74 in New York trading Tuesday, giving the San Jose, California-based company a market value of about $33.3 billion. The shares have risen about 14% in the past year.StubHub, which lets people buy and sell tickets to concerts and sporting events online, had $1.1 billion in net transaction revenue in 2018, an increase of 6% from a year earlier, according to EBay’s most recent annual report. EBay bought it for $310 million in 2007.Classifieds had about $1 billion in revenue during that same time period, an increase of 14% from a year before. Classifieds, which operates under brands including Mobile.de, Kijiji and Gumtree, helps people list various products and services, often for free.(Adds interest from Silver Lake in second graph.)\--With assistance from Liana Baker.To contact the reporters on this story: Kiel Porter in Chicago at kporter17@bloomberg.net;Scott Deveau in New York at sdeveau2@bloomberg.net;Gillian Tan in New York at gtan129@bloomberg.netTo contact the editors responsible for this story: Daniel Hauck at dhauck1@bloomberg.net, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • ValueAct: 15% Per Annum With Activism
    GuruFocus.com

    ValueAct: 15% Per Annum With Activism

    A look at some of the investments in the ValueAct portfolio Continue reading...

  • U.S. Firms Steer Clear of Europe's Big Mobile Tower Sell-Off
    Bloomberg

    U.S. Firms Steer Clear of Europe's Big Mobile Tower Sell-Off

    (Bloomberg) -- European phone companies are selling their mobile masts and growth-hungry U.S. tower companies have money to spend -- it looks like a marriage made in heaven.Instead, firms like American Tower Corp. and Crown Castle International Corp. are largely staying away, making it easier for Spain’s Cellnex Telecom SA and infrastructure funds managed by Macquarie Group Ltd., KKR & Co. and others to sweep up the region’s tower assets.Their hesitation is driven partly by price: the global hunt for yield has driven up the premium for these assets, which offer reliable, steady income streams. Independent tower companies also won’t pay top dollar unless they see a path to significant revenue growth -- and that’s where they have a problem with Europe.“The American tower companies say, ‘OK, Europe is fine at the right price, but prices are not where we need them to be, so we think the opportunities elsewhere are more attractive,”’ said Nick Del Deo, senior analyst at U.S. research firm MoffettNathanson.Tens of thousands of European masts are expected to see ownership changes in the next two years as companies such as Iliad SA, Vodafone Group Plc and Telecom Italia SpA bring in new investors to reduce debt and share the heavy cost of rolling out 5G technology.But only a quarter are likely to end up with independent operators, according to TowerXchange. Vodafone and CK Hutchison Holdings Ltd. are creating separate units for almost 90,000 towers and the consultancy expects them to maintain control over those businesses. That’s a turn-off for independent companies, which try to maximize revenue by leasing mast space to as many network operators as possible.Many European carriers want to keep some hold on their towers because they see mobile infrastructure as a strategic asset that can help them manage costs and perhaps gain a competitive edge. They’re also mindful of what happened in the U.S., where operators rushed to sell their towers more than a decade ago only to find themselves stuck with a big bill for leases and capacity rights.Vodafone Surges on Possible IPO, Stake Sale of Towers UnitVodafone and Telefonica Ink 5G Terms in Move to U.K. Tower SalesNiel Agrees to $3 Billion of Phone Tower Sales to CellnexCK Hutchison to Separate Out European Phone Towers BusinessSelling full ownership of towers to independent players can spur innovation and reduce expenses by encouraging carriers to share infrastructure, avoiding costly duplication. European carriers’ insistence on maintaining control means the continent’s progress in rolling out 5G will likely continue to be slower compared to the U.S., where towers are largely in independent hands.“There is a risk that the European carriers go too far the other way,” Del Deo said. “The captive tower model, if you look globally, has never proven to be that effective.”For now, American Tower is mostly relying on building towers in Africa, Latin America and India for its international growth.Crown Castle didn’t respond to a request for comment on its future European asset bidding plans. American Tower declined to comment. Its chief executive officer, James Taiclet, told analysts last month that recent large European tower sales didn’t meet its bar for growth prospects and asset costs.Here are some other reasons why U.S. tower firms aren’t piling into Europe:Redundancy: Europe has more cases of towers operated by rival carriers sitting in close proximity. An independent owner may want to remove one to cut costs, but the tower often comes with a ground lease that they must keep paying for years.Less Potential: Europe has lots of rooftop antenna sites, which can’t accommodate as many customers as can a ground-based tower. Many European portfolios include broadcast towers in rural areas that may not be as valuable as mobile towers.Radio Emission Rules: In some countries, rules on maximum electromagnetic radio emissions limit the number of antennas a tower firm can install at a single site.\--With assistance from Scott Moritz.To contact the reporter on this story: Thomas Pfeiffer in London at tpfeiffer3@bloomberg.netTo contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net, Jennifer Ryan, Anthony PalazzoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Exclusive: KKR explores $5 billion sale of Epicor Software - sources
    Reuters

    Exclusive: KKR explores $5 billion sale of Epicor Software - sources

    Companies such as Epicor that generate recurring revenue through business software sales have been popular targets for the private equity industry. The sources said that Epicor will likely attract interest from other buyout firms. KKR is working with an investment bank on an auction for Epicor, the sources said, cautioning that no deal is certain and requesting anonymity because the matter is confidential.

  • Goldman Sachs Plans to Automate Trading by Hiring 100 Coders
    Zacks

    Goldman Sachs Plans to Automate Trading by Hiring 100 Coders

    Goldman Sachs' (GS) investment in technology is expected to boost revenues by increasing the number of trades it can complete.

  • Reasons Driving Conversion of Private Equities Into C-Corp
    Zacks

    Reasons Driving Conversion of Private Equities Into C-Corp

    Favorable markets and conversions into C-corps, which kick-started post the 2017 tax overhaul, are providing a boost to shares of private equity firms.

  • Policy Makers Should Take a Look at Private Equity
    Bloomberg

    Policy Makers Should Take a Look at Private Equity

    (Bloomberg Opinion) -- Private equity — a form of investing that typically involves assuming control of companies — has long been among the most controversial and poorly understood areas of finance. Even as it attracts ever more money from institutional investors, including pension funds acting on behalf of teachers and firefighters, its practitioners face increasing criticism for taking undue advantage the businesses they target.Now, with a new bill in Congress, presidential candidate Elizabeth Warren has sparked a debate about how to curb private equity’s more predatory aspects. Despite the political posturing, her plan includes a couple of good ideas.The most popular private-equity strategy stems from a tenet of finance theory — that an actively involved owner can do a better job of running a company than a diffuse group of passive shareholders. To put this into practice, firms such as Blackstone, TPG, Apollo and KKR raise money from investors, which they use to take significant or controlling stakes in companies. Ideally, they then improve the businesses, with the goal of selling at a profit within several years.When they adhere to this model, private-equity firms can play a useful role in the economy. The process isn’t always great for everyone involved. It can entail layoffs, cost-cutting and even dismantling. (Sometimes the best option for a mature business is to shrink along with a diminishing market.) But if assets are put to their best use, the country as a whole gains.The trouble is that private-equity executives’ incentives aren’t always aligned with the greater good.Consider compensation. Private-equity funds are typically set up as partnerships, with the firms serving as general partners and investors as limited partners. The latter pay management and performance fees to the former, which choose the target companies. Yet the general partners also extract fees directly from the companies — purportedly for management services and advice on mergers and acquisitions, although the fee agreements often don’t require them to do anything at all. Thanks to such “monitoring and transaction” payments, which amount to hundreds of millions of dollars a year in the U.S., private-equity executives can come out ahead even if the companies go bankrupt and investors lose out.One might reasonably ask why investors accept such terms. The answer, in part, is that they suffer from the same oversight problems that private equity is supposed to solve: They’re diffuse, have limited powers and are usually managing other people’s money.Granted, in recent years investors have pushed private-equity firms to rebate a portion of monitoring and transaction payments. This can make investment managers at pension funds and endowments look better by offsetting the management fees that their bosses and clients track. These rebates do not, however, lessen the drain on the companies concerned or necessarily erase the firms’ perverse incentives.Private-equity firms also have strong incentives to load up companies with too much debt. For one, they can use the borrowed money to pay themselves special dividends — a way of cashing out their investments quickly. And the government subsidizes debt: The tax code treats most interest payments as a deductible expense, unlike payments to shareholders. This makes borrowing artificially cheap, allowing firms to reap added returns merely by levering up. As of late 2018, the typical ratio of debt to operating income at private-equity-owned companies was about four times that of the average company in the S&P 500 index. Such extreme leverage has a big downside. It makes the target companies — and the people they employ — more vulnerable in slumps, as interest payments overwhelm their declining income.How can lawmakers discourage the bad kind of private equity without killing off the good? Warren has a plan. Together with several Democratic co-sponsors, she has introduced a 103-page bill that she says will stop “legalized looting.” It contains provisions dealing with everything from the basics of corporate structure to the minutiae of bankruptcy proceedings. Moderate it is not.One provision takes aim at a foundation of modern capitalism: limited liability, the idea that shareholders should not be on the hook for a company’s debts. It makes an exception for general partners in private-equity firms, holding them responsible for the obligations of target companies. This means that a single failed investment could lead to personal bankruptcy.No doubt, the prospect of financial ruin would make private-equity executives more cautious about borrowing. But it would also make them less willing to participate in an inherently risky endeavor — most likely killing private equity as an investment strategy. It’s hard to see how this would be a net gain for the economy.Setting aside that sledgehammer, the bill has some constructive proposals. For example, it would halt the fees that private-equity firms extract directly from target companies. That’s wise, because the firms have no good reason to pay themselves for running companies they own, particularly when they are already receiving fees from investors. If the market can’t impose this discipline, legislators are right to step in.The bill also prohibits special dividends in the first two years after an acquisition. The period is somewhat arbitrary, but this could lead private equity firms to focus more on improving businesses than on extracting cash, at least initially. Experience suggests it wouldn’t be too onerous: Europe imposed a similar ban several years ago with no ill effect.When it comes to the government subsidy, the legislation is strangely timid. It limits the deductibility of interest only for highly leveraged companies. Why not remove the subsidy completely, by taxing payments to creditors and shareholders equally? This would have beneficial effects far beyond private equity, eliminating an incentive to lever up that renders the whole economy more fragile.Lastly, Warren would shut down the well-known “carried interest” loophole, which allows performance fees to be taxed at low capital-gains rates rather than as ordinary income. That’s a good idea. It’s a pity the bill doesn’t also explicitly preclude other dodges, such as slipping private-equity stakes into individual retirement accounts — a strategy made famous by former presidential candidate Mitt Romney.In sum, policy makers do need to take a look at how private equity is taxed and regulated. Warren’s plan includes some good ideas but fails to take up others — and can’t seem to decide whether it wants to shut the business down or just nudge it in a better direction. It’s a plan, all right, but one that needs more work.—Editors: Mark Whitehouse, Timothy Lavin.To contact the senior editor responsible for Bloomberg Opinion’s editorials: David Shipley at davidshipley@bloomberg.net, .Editorials are written by the Bloomberg Opinion editorial board.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.