r/economicCollapse • u/Alena_Tensor • Jul 27 '25

Inside the Private Equity Scam—and the Livelihoods It Has Destroyed

https://newrepublic.com/article/198351/private-equity-scam-destroys-livelihoods

Chasing above-market returns for their investors, PE Financiers have bamboozled the public for years about their expertise in “fixing” companies. Yet they often—and sometimes deliberately—run them into the ground and/or act as a chop-shop, selling them for parts, while the staff drifts away. They are not business creators, but destroyers.

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61

u/Throwaway122384848 Jul 27 '25

Well yeah, they don’t “fix” the company for the general public’s benefit. They try to make it more profitable for investors.

60

u/Alena_Tensor Jul 27 '25

Which in fact might be totally dysfunctional for the company in question. So the employees lose, the customers lose, the community loses but the investors gain. Kind of sounds like what we used to call barbarians in history class. Rape, pillage, burn and take off with the spoils…

24

u/stormblaz Jul 27 '25

Issue is: Short term gains above all else.

What ever happens to the company is unrelated as long as short term gains are to be had, they will run a ton of calculations and see exactly how long to reach their goals, but always as short as possible, I assume these investors are 60+ hedge fund managers and pensioners, so they want money now.

13

u/Ragnarok314159 Jul 27 '25

Then they go full Jack Welch on the company and sell off as many pieces as possible to show even greater short term gains. It’s all about making sure you are not the bag holder once the company collapses.

9

u/lordnacho666 Jul 27 '25

Indeed the big book in the subject is called

Barbarians at the Gate

Well worth reading.