How private equity kills companies and communities
1 min read
Summary
In a new Decoder podcast, journalist Megan Greenwell discusses the private equity industry’s impact on the US economy.
She comments that private equity firms are very hands-on when it comes to the management of the companies they invest in.
The industry often buys businesses that have strong cash flows but are experiencing troubles, with the private equity firms then restructuring the debts and applying greater focus on profitability.
Greenwell highlights four sectors that private equity has impacted: retail, media, housing, and healthcare and notes the negative consequences felt in many of these areas.
On the topic of healthcare, Greenwell underlines the financialisation of the US system, commenting that it has become “all about return on investment”, causing many people to struggle with issues such as unexpected bills and the increasing difficulty of finding a doctor who will accept their insurance plan.
Greenwell also discusses how private equity differs from venture capital and how the private equity industry emerged from New York’s real estate market.