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. cool_dude85 · 1789947081 · focus · HN ↗

         What does it mean in this context to be more intelligent and shrewd than the existing owners? Delivering better profit margins?

         1. ChickeNES · 1789972915 · focus · HN ↗

            There's more than one form of intelligence, and being good at fixing people doesn't necessarily correlate with managing a business. As silly as it sounds, watching Shark Tank will really demonstrate that someone can have a legitimately great idea, but if they aren't business minded, it wont matter.

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