To their critics, private equity firms are blood-suckers that load healthy companies with debt then asset-strip them, leaving lifeless husks. The private equity titans counter with the opposite tale: they buy underperforming firms, install whizzy IT systems and inject far-sighted management, borrow money to juice up performance, and turn them into roaring engines of capitalism, making everyone rich. As ever, the reality is a mix of the two.
The core of private equity’s problem – for society, but not for its investors – is that many of the tricks in private equity’s toolbox just redistribute the pie upwards, generating immense profits but deepening inequality and sapping growth.
He wants to stop private equity. Because summat. So, who will put the fear of God into the inefficient capitalists, insist that they must become more efficient?
No one apparently, meaning that the future will be poorer than otherwise as there is no ratchet increasing productivity over time. But Nick Buddy will have had a pat on the back from his mates so that’s alright then.