Thread

1. NegativeK · 1789944184 · focus · HN ↗

   Can someone steelman private equity, please? I'm honestly looking for the upsides (for non-investors) of when PE moves into an industry like medicine and begins buying up businesses that traditionally aren't already large chains.

   I already hear the downsides frequently from someone whose work is directly affected.

   1. mhh__ · 1789946857 · focus · HN ↗

      PE staff are more intelligent and more shrewd than the people running the businesses they buy. Being a good doctor doesn't make you a good businessman.

      I'm not a huge fan of PE but the point of economics to deliver cheap and quality goods to consumers not keep people in a job.

      In healthcare in US in particular I think the main thing that capital should be (if regulators allow) boutique / specialists that e.g. are the best in the biz at doing MRI scans, in some states my understanding is that it's literally illegal to start a business aiming to make one small part of the process better.

      1. throwaway20222 · 1789947524 · focus · HN ↗

         What shows that they are more intelligent? They might be better at extracting value from enterprise, but is that generally “more intelligent?”

         1. mhh__ · 1789947622 · focus · HN ↗

            Well they're considerably better paid and in a business that allows economies of scale.

            It's a steelman argument to be clear I'm not entirely convinced by it.

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