Thread 516047219

>"NOOOO YOU CANT POOL YOUR MONEY TOGETHER AND BUY A BUSINESS AND MAKE IT MORE PRODUCTIVE AND EFFCIENT"

>"NOOOOO YOU CANT POOL MONEY WITH FELLOW CITIZENS AND BUY HOUSES AND APARTMENTS TO RENT THEM OUT TO PEOPLE"

My dad works in private equity and he finds these arguments so laughable. First off, he explains how private equity is needed to keep businesses productive. If a business slacks off, a competitor firm might take its place, and that's fine, but that often uses up lots of resources and might not be necessary. Private Equity is like woah hold on, I'll buy you for cheap because you're a dogshit company, I will make you NOT a dogshit company, and will sell you off after we're done patching you up so you can actually be competitive.

Oh and even if this wasn't the case, he's like "it's our fucking money". Why the FUCK should you be allowed to tell him and his LP investors where they can put their own money? Is it illegal to buy a business now? Does that mean it should be illegal to SELL a business? If there's no buyers there's no sellers. Just absolute horseshit from the left.

>>516047219 (OP)
cause it always results in worse products when investors demand returns

>>516047219 (OP)
Hating private equity is the new current thing.
They think that private equity ruins businesses, when in reality the reason that those businesses ended up owned by private equity in the first place is because they were already ruined.

>>516047219 (OP)
>NOOOO WHY CANT MY JEW FINANCIAL CABAL CONTROL THE SHARES OF EVERY COMPANY NOOOOO
destroy shareholder capitalism

>>516047219 (OP)
All I know is that the people who work at PE firms make shit tons of money
I interned for a house flipper that was an analyst at a PE firm for a few years and he would drop $300k cash on a house on a dime and not even flinch

There's also people who just don't understand what private equity is at all like >>516047379. They only know that it's bad.

>>516047423
No the reality is private equity predates on SMEs in order to destroy them and strip their assets

>>516047219 (OP)
>AND MAKE IT MORE PRODUCTIVE AND EFFCIENT"
Excellent bait

I would no sell my business to a PE unless it was for a LOT of money

>>516047379
How does making a product worse make investors richer? The way you succeed in capitalism is by producing a great of a product as you possibly can for as few inputs as possible.

>>516047219 (OP)
>I will make you NOT a dogshit company, and will sell you off after we're done patching you up so you can actually be competitive
Translation = I will buy you out, hollow your shit out, rape you gape you and toss your husk away

>>516047736
By cost cutting retard. Babby's first libertarian

>>516047423
Facts.

And even when they do "ruin" a business by liquidating it, it's because that business was so inefficient that it's parts are better off somewhere else in the economy.

Like in Wallstreet, Ghekko bought that airline, and literally made more selling the planes off to competitor airlines than the cost to purchase the entire airline... that means that airline was a net destroyer of value. It was using expensive planes to produce sub par profits. In which case, GOOD, Private equity should destroy zombie companies.

>>516047633
If a company is so shittily run that it's somehow worth LESS than the sum of its parts, why should that company continue to exist?

>>516047736
Those few inputs are corner cutting and fucking the end experience for the consumer. Profitable for them doesn't mean better.

>>516047219 (OP)
Can you give some examples of private equity improving a business?
Most of the time they knowingly run the business into the ground as long as they can and just bail out with little consequences while everyone else loses their jobs
I'm not against private equity just need to assume Jews gonna Jew and set up some safeguards

>>516047219 (OP)
>why should you be allowed to
Because we have laws dipshit end of story. Because it is causing problems outside of your selfish ass that’s why.

>>516047577
He was probably a Senior Partner. Analysts make about 80k a year.

>>516047633
If you can make a profit by buying a SME and selling off its assets, then that was a dogshit business that was using its assets so inefficiently that its a more productive use to just sell them off to competitors (who will make use of the assets in a more efficient manner).

>>516047849
You're fucking retarded and don't understand how competitive business works. If a company chooses to make a shitty product just to cut costs, customers will gravitate towards competitors OR they will have to lower prices. You can't make abnormal profits in the long run by just cutting costs, quality, and keeping prices the same.

You're like a child that doesn't understand how the world works.

>>516048049
I forget what he was truth be told. He was some country dude at my university looking for interns and I got “lucky”
(Quotes, because we found some rancid horrible shit at some of the homes we acquired)
>t former finance student

>>516047219 (OP)
"my erm dada works in erm"
get a job loser
Also being greedy and making products worse is literally the endgame of these businesses that get bought out. These people slash jobs and make products worse.

>>516047736
Typically it involves Enshittification of the product via cutting corners by getting worse quality materials or firing people like QC/QA and things of that nature. Depending on the product, like MTG, it can involve an unsustainable short-gain profit scheme that ultimately leaves the product in a worse spot but since the initial investors profited they get away without much issue and it's up to whoever is left to try to fix the mess.

>>516047965
The customer is free to go to a competitor if they feel they are getting better bang for their buck there.

>>516047995
>Most of the time they knowingly run the business into the ground as long as they can and just bail out with little consequences while everyone else loses their jobs

Why would you buy a business for BILLIONS of dollars, just to run it into the ground?

There's so many companies that private equity improved but they're mostly small no names that you wouldn't have heard about. My dad has told me stories of private equity at his firm where they buy a shitty logistics company or trucking firm, implement new technologies to make it more efficient, save MASSIVELY on costs, make major profits, and sell the company off for like 2.5x as much.

So many boomers run forestry companies or some manufacturing plant and they don't know what they're doing because they still think it's 1975. Private Equity takes it off their hands and modernizes it.

>>516047736
A brand has goodwill from consumers from when it was well known. Private equity then comes in cheaps out on everything and lowers quality while consumers slowly realize the product quality is getting worse and they stop purchasing eventually.
Look up Southwest Airlines.
Your dad is lying his ass off to you to protect his image of looking like a scumbag to his kid.

>>516047219 (OP)
none of what you wrote is true in the USA.
What has private equity improved? The things they buy turn to shit and leaves society worse off while they go fuck little girls with their stolen money.

>>516048015
Yeah the laws should protect my property and liberty. Not tell me I can't buy a busiesins.

>>516047995
This.
>>516047219 (OP)
Your father is the worst of capitalism.

>>516048224
That's pretty sick actually.

>>516048298
>Also being greedy and making products worse is literally the endgame of these businesses that get bought out. These people slash jobs and make products worse.

You're a loser who doesn't understand economics.

>>516048358
This is completely untrue.

If private equity only made businesses better in the short-term but screwed them long-term, why do investors buy businesses that have been restructured by PE?

If private equity makes a business good for a few years and then it crashes, why is anyone buying from them? These theories make absolutely no sense.

>>516048210
>Water
>Heating
>Public transport
>Sewage

Explain to me why these are private, when the consumer has zero choice in provider

>>516048543
The consumers are free to go to a competitor if they don't like the change in quality.

>>516048573
So many countless businesses. The reason productivity in America is so high and our economy is so good is because we allow unfettered finance to make things razor efficient.

In Europe they have so many regulations that prevent this sort of thing so you end up with inefficient zombie firms.

>>516048808
Because it is believed that private enterprise is more efficient at running things than state bureaus.

There is an argument for those utilities to be regulated on a State level to prevent price gauging because of the natural monopolistic nature of the faculties. I am ok with that but it's a State by State issue.

Basically the law would stipulate that they are forbidden from raising prices more than 5% over average cost.

>>516048742
>only
Kill yourself you dishonest fuck. You aren't even addressing anything, just going from talking point to talking point

>>516048742
Because on paper they think it's a great profitable business from the recent cost cutting. The floor hasn't dropped yet.
Your dad literally knows this shit. He is bullshitting.

>>516049201
Ah so investors who buy from private equity firms are just being scammed and they still haven't caught on?

The investors or conglomerates that buy from these private equity funds after a restructuring, they are all getting bamboozled and just haven't figured out yet?

>>516049098
I addressed what you said.

You think that private equity just buys up a business and makes it shitty through cost cutting, im telling you that would not lead to a profit, that would lead to a LOSS.

If i go buy a bar, and I just cut costs on everything and "Stripped" all the assets like the glasses and furniture, I my bar would go bankrupt within weeks.

>>516047219 (OP)
Private Equity Firms just pump and dump, they only answer to the shareholders.

>>516049632
Not how business works my friend.

>>516047219 (OP)
Lol I like how they screech about leverage buyout. Like yeah you put a down payment down and use future profits to pay the mortgage. It's not much different from buying a house.

>>516049682
FACTS

>>516049316
The market is not efficient. They are a lot of investor money that are lost. The people that are good at investing spread their risk. The silicon valley billionaires you read on the news invested in many startups that went nowhere. They just happen to hit 3 or 4 megahits out of like 50, for example.

>>516047219 (OP)
> Why the FUCK should you be allowed to tell him and his LP investors where they can put their own money?
Because society comes before the individual

>>516047219 (OP)
When PE does it the way you say, its a good thing. Unfortunately, a lot of PE simply sucks the assets out, skeletonizes the company and leaves it to die. They like to do this to legacy brands that people like. Thats probably where the hate comes from.

They are evil? Evil is bad and should be killed

>>516049888
>The market is not efficient. They are a lot of investor money that are lost. The people that are good at investing spread their risk. The silicon valley billionaires you read on the news invested in many startups that went nowhere. They just happen to hit 3 or 4 megahits out of like 50, for example.

You just described how the market is efficient.

>>516049988
He's helping society.

>>516049989
How does buying a business and running it into the ground make anyone profit?

If you bought a business tomorrow, what would you do? Would you intentionally crash it into the ground, or would you try to improve it so you can make more profit?

>>516048650
You are a retard that thinks bad economics is good economics.

>>516050167
>How does buying a business and running it into the ground make anyone profit?
They strip the assets and thats what tanks the company. If they can make more from asset sales than the company is worth in repairs thats what they do. As long as the balance sheet is in the black at the end of it all, theyve made their money. Guys like Icahn are infamous for doing this.

>>516047578
Don't you know? If business are fundamentally broken, its better to let them limp along instead of reallocating the resources they're wasting. After all you wouldn't want to fire people. All business should be an unsustainable jobs program.

>>516047736
>How does making a product worse make investors richer?
why do light bulbs not last very long?

>>516049316
Is your argument actually that people in finance never talk other people in finance into taking a bum deal? Seriously? There are entire industries based on Jewing each other

>>516050377
You're dumb and don't understand any economics.

>>516050619
>They strip the assets and thats what tanks the company. If they can make more from asset sales than the company is worth in repairs thats what they do. As long as the balance sheet is in the black at the end of it all, theyve made their money. Guys like Icahn are infamous for doing this.

That must mean the business was trading at below NAV in which case it's such a dogshit business that it's a more efficient use of resources for the assets to be sold off to someone who can make better use of them.

If the sum of the parts of the business are being used so efficiently that it's worth it to sell them to a different business (that will use them better), then that's GOOD.

>>516050866
Because they get extremely hot and the coil melts and we haven't mastered the technology of making them last longer yet.

>>516051053
That's how you lose your entire career. You're saying that the heads of giant investment trusts are bribed by PE people to buy shitty firms from them that they know will be run into the ground?

>>516051106
>If the sum of the parts of the business are being used so efficiently that it's worth it to sell them to a different business (that will use them better), then that's GOOD.
Didnt say it wasnt, just said that if its a legacy brand that people "feel" nostalgic about, they tend to hate PE for it.

>>516051370
Ah fair enough, well if they like the brand so much they should continue shoping there.

>>516051226
Every post you make you sound incredibly naive. Are you even older than 18? Do you also believe in magic and dragons?

>>516051971
Is this you?

>The market is not efficient.
>Because on paper they think it's a great profitable business from the recent cost cutting. T
>A brand has goodwill from consumers from when it was well known. Private equity then comes in cheaps out on everything and lowers quality while consumers slowly realize the product quality is getting worse and they stop

Literally how I saw the world when i was 14.

>>516051148
No. You have been wrong about everything in your own thread.
>>516050866
To sell lightbulbs.

>>516047219 (OP)
Dude in your country you can't even read financial statements of a company if it isn't a public and/or big corporation.
No balance sheet, not cash flow statement, just number sharted out by management.
Your country is a disgusting place from accountancy viewpoint.

>>516048210
You retard it's you who are the child. Was Toys R Us improved after it was bought out? Was Panera bread improved after the buyout? Companies don't get better after they go public they get MILKED and RAPED. Sure some popup comes and replaces them but you lost the original experience. Meanwhile the local bbq place near me stays private and makes a fortune and had been around for like 40 years unchanged

OP is an econ undergrad who just learned babbies first BASED free market theory. On paper it looks cool. In practice human nature (vulture jews) form coalitions and oligarchies to stifle competition while cheapening the output of their latest host

>>516048742
Your cunt father deserves the Thompson treatment. Fucking loser

>>516051106
Bro stfu, you are a neet or working minimum wage. Who cares what you think, you don't contribute anything to the economy. ERm my dad erm

>>516053868
Yeah because that's nobodys business, they're a private company.

E.U is absolutely disgusting with no respect for property rights.

>>516054676
Spiteful mutant losers like yourself will never be anything more than poor and envious.

>>516054320
>On paper it looks cool. In practice human nature (vulture jews) form coalitions and oligarchies to stifle competition while cheapening the output of their latest host

You should learn economics.

You hold the same opinions i had when i was 12 years old. Which makes me think you're under 15. People that age just believe in every conspiracy under the books and think the world is out to get them.

OP stfu and get your daddy in here, we don't' care what you think, you don't' have a job.

>>516047219 (OP)
Its a bigger issue.

Companies have been forced to focus on shareholders over employees. So the person who makes the thing, makes less than the person who owns the thing. You probably think this makes logical sense, its their money after all, their risk, if the employee loses they lose a job. If the owner loses they lose the whole company.

The problem is companies don't lose anymore, and owners don't work anymore, and partly that is because back to square 1: Companies focus on shareholders first over employees. They've been forced to by governments which have enacted laws and bailouts to ensure they don't fail. This means that over-sized profits get paid to shareholders through the company hording their profit through assets, buying other companies, buybacks or dividends. The owners themselves don't do shit, they just hold assets, and start family offices to hold these assets (assuming they're holding more than one major asset).

Private Equity is the middle-man vulture getting fat on the carcasses around the current economic system. They don't "improve" anything. They find businesses that are smaller/weaker competitors to the big predators, and buy them, make them 'efficient' by cost cutting the products down to being crap then sell it off to conglomerates which are too big to let fail. This means instead of products A, B and C, you now just have A1/A2/A3 all the same and all sold by Nestle.

The reason why PE makes so much money is that conglomerates win in the long run anyway by cutting out a competitor and gaining more resource to horde, PE takes a nice slice of the deal in the middle. It also isn't 'their' money. They're all finance bros who got rich through advising companies, usually former investment bankers or consultants, and its another case of companies throwing money to other companies rather than its employees.

Honestly we're heading back to feudalism. Janitor or Doctor won't matter soon, just what do you/your family own in assets.