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. dghlsakjg · 1789952787 · focus · HN ↗

      Private equity just means controlling a company outside of the public stock markets, it is incredibly broad, and covers everything from blackrock buying every vets office in an area, to a plumber buying out another plumber when they want to retire.

      The steelman argument is that private equity is just property rights. If I build a business I get to decide what to do with it.

      What most people are arguing against is a specific kind of PE where an institutional investor will either use aggressive financial engineering to force a profit, even if it kills the business, or when those same investors aggregate market share to the point where it is detrimental to consumers. Sprinkle in a little bit of heartless MBA bullshit, and that is what people specifically don’t like.

      1. mizzao · 1789996057 · focus · HN ↗

         Berkshire Hathaway is in some sense also PE (though done by a public company that you can invest in) and Warren Buffett's culture is to find great companies run by great managers and let them cook. That long-term view is the exception and not the rule though.

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