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tduan | 2 years ago

Genuine question, why do most articles discussing PE seem to portray them in a malicious light? Fundamentally, PE investors have skin in the game - they do invest on behalf of their LP, but typically GPs contribute a portion of their own income into the fund as well, not to mention their compensation is tied to performance. The consequence of that gives them every incentive to help a company succeed, and not ruin it.

Sure there are failures as with every investments, but one can simply evaluate the overall returns within the asset class across a period of time to see that there is value being created (or at least allocated)

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archon810|2 years ago

Because Private Equity is associated with squeezing every penny from the purchased business and making user experience a secondary concern.

For some examples, read some of the stories in other comments here and on the web.

tduan|2 years ago

Here's another perspective - I've seen PE firms do as you described, cut costs and fire employees, just as much as I've seen them inject more capital into a business and help them with further M&A. Having better user experience can lead to increased revenue (better product, improved branding - leading to increased market share for example) - which should equally be an incentive to PE firms as well.

None of the anecdotes you mention counteract the nature of the industry as whole: https://caia.org/blog/2022/07/20/long-term-private-equity-pe...

I've already caveated that bad investments may occur. My question is why the negatives are being focused versus the positives?