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Posted
I really think we need to get rid of these private equity vultures. This article on hospital landlord Medical Properties Trust is BONKERS. Over a dozen of its hospitals have collapsed while its stock soars, buoyed by a food wholesaler and a math professor who bought nearly $500 million of the stock. How these two guys came up with the money to fund their half-billion dollar investment is beyond me.


https://prospect.org/health/2025-03-18-hospital-empire-closing-its-doors-stock-on-a-tear-mpt/
 

From the article:

How these two low-profile gentlemen came up with the funds to finance their nearly half-billion-dollar combined investment in MPT is a head-scratcher. Yet’s seafood wholesaler D&T employs 24 staffers and generates about $7.5 million in annual revenue, according to Experian Business Services; the biggest transaction in which he has publicly engaged is the sale of a vacant property owned by one of his real estate partnerships in San Jose for $6.9 million in 2023. And while He has owned stakes in companies valued as high as $20 million in the past, he declared in 2022 under penalty of perjury that his income totaled just $10,000 a month, in an application for criminal indigent status he filed after local police arrested him for punching and threatening to kill the mother of his then 17-month-old child at the house they apparently shared in Odessa, Florida. He told the Prospect that the case was a personal matter that was dropped.

He said on the application that his sole source of income at the time was the earnings from three businesses he owned in Tampa, presumably a reference to nightclubs he co-owned with various area promoters he would later accuse of defrauding him. He made no mention of his home and assets back in Reno with his presumably estranged wife. The following year, He moved to a condo in Houston and incorporated a number of entities that appear to be hospitality-related, including something called Tyshin, Inc., he formed in partnership with Sun Jiang, a moderately prolific sushi restaurateur.

Both Jiang and Yet now live in Sugar Land, Texas, an affluent suburb about 20 miles southwest of Houston. Perhaps coincidentally, so does Steve Hamner, MPT’s chief financial officer of more than 20 years, whose stately 5,300-square-foot home is about four miles from Jiang’s home and Tyshin headquarters.

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Posted

As the saying goes, if you don’t do politics, politics will do you. The same is true of PE firms. I once directly reported to a guy who came to us from a private equity firm. He considered himself to be smartest, hard nosed around, but once confided to me that the unethical predatory practices of his former employer was too much even for him.

Posted
47 minutes ago, Horn Under a Bad Sign said:
I really think we need to get rid of these private equity vultures. This article on hospital landlord Medical Properties Trust is BONKERS. Over a dozen of its hospitals have collapsed while its stock soars, buoyed by a food wholesaler and a math professor who bought nearly $500 million of the stock. How these two guys came up with the money to fund their half-billion dollar investment is beyond me.


https://prospect.org/health/2025-03-18-hospital-empire-closing-its-doors-stock-on-a-tear-mpt/
 

From the article:

How these two low-profile gentlemen came up with the funds to finance their nearly half-billion-dollar combined investment in MPT is a head-scratcher. Yet’s seafood wholesaler D&T employs 24 staffers and generates about $7.5 million in annual revenue, according to Experian Business Services; the biggest transaction in which he has publicly engaged is the sale of a vacant property owned by one of his real estate partnerships in San Jose for $6.9 million in 2023. And while He has owned stakes in companies valued as high as $20 million in the past, he declared in 2022 under penalty of perjury that his income totaled just $10,000 a month, in an application for criminal indigent status he filed after local police arrested him for punching and threatening to kill the mother of his then 17-month-old child at the house they apparently shared in Odessa, Florida. He told the Prospect that the case was a personal matter that was dropped.

He said on the application that his sole source of income at the time was the earnings from three businesses he owned in Tampa, presumably a reference to nightclubs he co-owned with various area promoters he would later accuse of defrauding him. He made no mention of his home and assets back in Reno with his presumably estranged wife. The following year, He moved to a condo in Houston and incorporated a number of entities that appear to be hospitality-related, including something called Tyshin, Inc., he formed in partnership with Sun Jiang, a moderately prolific sushi restaurateur.

Both Jiang and Yet now live in Sugar Land, Texas, an affluent suburb about 20 miles southwest of Houston. Perhaps coincidentally, so does Steve Hamner, MPT’s chief financial officer of more than 20 years, whose stately 5,300-square-foot home is about four miles from Jiang’s home and Tyshin headquarters.

LMAO at claiming indigent status when making $10k/month. "All I have is these 3 profitable businesses 😢

Posted

Steward, one of the main characters in the MPT story, was PE-backed Ponzi scheme that bought up distressed hospitals (St. Joe’s in downtown Houston being one of them) and then sold the real estate assets to MPT for inflated sums in order to quickly funnel cash back to investors. The hospitals that Steward owned were, at best, B-team players and already struggling financially when Steward acquired them. The one time I had to go to Dallas to meet with their C-suite, my immediate thought was that their lavish corporate HQ decidedly did not match the hospital facilities that they ran.

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Posted
12 minutes ago, Satchel said:

Who Employs Your Doctor? Increasingly, United Healthcare

United Healthcare through its Optum subsidiary is by far the largest employer of physicians in the US.

Posted
1 hour ago, Satchel said:

Who Employs Your Doctor? Increasingly, a Private Equity Firm.

A new study finds that private equity firms own more than half of all specialists in certain U.S. markets.

https://www.nytimes.com/2023/07/10/upshot/private-equity-doctors-offices.html

 

1 hour ago, royiv said:

United Healthcare through its Optum subsidiary is by far the largest employer of physicians in the US.

Yep.  90% of dermatology offices in Austin are PE owned. Providers (MDs, PAs, and NPs) pretty much have no choice. They are all employees now. The days of private practices (for MDs, the others have always been employees) are long gone. 

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Posted

"I want to believe there's a heaven. But I can't not believe there's a hell,"

I'm starting to share Vince Gilligan's sentiment more and more, and I'm not religious. More people than I could have ever imagined deserve it.

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Posted
17 hours ago, Firemans4Horn said:

IMG_7200.jpeg.8631b047b0b521bc0b128b34fceaefa6.jpeg

Yep.  My wife and I recently drove by the flagship Whataburger on the bay in Corpus Christi (she'd never seen it before).  At first, she commented wow, that's an amazing location.  Then she got quiet, and muttered "fucking Chicago assholes."

People who don't usually pay attention to this shit know that PE ruins everything it touches.  Yet, we keep giving them MORE room to run, not less.

There's a better than 100% chance that some sort of PE firm ends up functionally owning at least one -- probably more than one -- of our national parks within the next couple of years....as just one example of the giant shit sandwich we're all going to keep eating.

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Posted
15 hours ago, Biff Tannen said:

 

Yep.  90% of dermatology offices in Austin are PE owned. Providers (MDs, PAs, and NPs) pretty much have no choice. They are all employees now. The days of private practices (for MDs, the others have always been employees) are long gone. 

Yep, I started my group myself and did one exit in Jan 2019 and another planned this summer.  All these deals are NOT created equal.  In many/most instances where the founder doc stays engaged and actually spends money on proper representation, on an exit, things are totally fine and patients are thankful their docs are generally in a better mood due to a better lifestyle / better pay.  One huge caveat, we're the platform company meaning when we buy you're under me/us.  If you are not you have little to no power when you sell. 

But the billing out of network etc is zero issue with us and nobody has ever told me/us how to practice.  But just like anything else if you give the banks too much power they'll run anything over for the good ole dollar.  Also, the platform company is 100% owned by the friendly physician.  We're in 45 states and have 1500 doctors.  If they really wanted to push me there's several states I could just say fuck off and take over the operation on my own - again, it won't happen because we have a great relationship but I'm here to tell you, many times those PE firms are acting like that because a shady/soft doctor is letting it happen.  There's my 2 cents, flame away. 

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Posted
3 minutes ago, Brisketexan said:

Yep.  My wife and I recently drove by the flagship Whataburger on the bay in Corpus Christi (she'd never seen it before).  At first, she commented wow, that's an amazing location.  Then she got quiet, and muttered "fucking Chicago assholes."

People who don't usually pay attention to this shit know that PE ruins everything it touches.  Yet, we keep giving them MORE room to run, not less.

There's a better than 100% chance that some sort of PE firm ends up functionally owning at least one -- probably more than one -- of our national parks within the next couple of years....as just one example of the giant shit sandwich we're all going to keep eating.

LOL, PE absolutely does not ruin everything it touches.  Christ.  And I did laugh at the Chicago bit but let's be honest, Chicago has a lot less assholes than Texas.  Take a look in the mirror at your clown ass state.  

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Posted
4 minutes ago, ChiTownDoc said:

LOL, PE absolutely does not ruin everything it touches.  Christ.  And I did laugh at the Chicago bit but let's be honest, Chicago has a lot less assholes than Texas.  Take a look in the mirror at your clown ass state.  

Oh, I have no doubt that Texas's most abundant natural resources is idiots and assholes, and we are fully transitioning to being a resource-only economy.

But those particular Chicago assholes are indeed Chicago assholes who fucked up a place many of us loved.  This is America in 2025 dude....."abundant assholes" is our brand.

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Posted
2 minutes ago, Brisketexan said:

There's a better than 100% chance that some sort of PE firm ends up functionally owning at least one -- probably more than one -- of our national parks within the next couple of years....as just one example of the giant shit sandwich we're all going to keep eating.

Delaware North is privately owned and kind of owned part of Yosemite National Park a few years back.  They were the company contracted to run concessions in the park such as the Ahwahnee Hotel.  They got replaced by some other company when the contract was rebid.  Turns out, DN trademarked Ahwahnee and other names of property it did not own while operating the sites.  For a time the park had to rename its own property to avoid lawsuits.  The Ahwahnee was called the Majestic Yosemite Hotel during this time.

When my wife and I visited the park a few years back we were going to visit a restaurant in one of the large hotels outside of the park near where we were staying.  It looked great.  We pulled up and saw it was owned by Delaware North.  We turned around at the entrance and left.  Fuck those guys.

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Posted
Just now, Brisketexan said:

Oh, I have no doubt that Texas's most abundant natural resources is idiots and assholes, and we are fully transitioning to being a resource-only economy.

But those particular Chicago assholes are indeed Chicago assholes who fucked up a place many of us loved.  This is America in 2025 dude....."abundant assholes" is our brand.

More than fair, just had some recent arguments with Texans talking shit about Chicago and we skated around politics but those were not these Surly Texans...also, I'm pretty good at talking shit so they didn't have much to say after 10 minutes...and I owe much of my shit talking acumen to this place.  So, thank you...

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Posted

Currently work in PE so call me jaded. I get the viewpoint of many regarding PE firms but understand that there are a gazillion firms out there and only the shit heels are making the headlines. For whatever reason (I have my guesses), the PE firms focused on the medical industry seem to be having the most visible fuckups lately. 

There is also a huge difference between a two man "PE" team and a full fledge team of investors. The two man team here is more like a family office than a typical PE environment. You don't really have any checks and balances with a 2 man team but when the investment team is 50+ professionals, you're going to have a ton of discussion and opinions before making stupid decisions. Stupid decisions result in both scenarios but considerably less in the latter. 

I'll speak for our firm on the ethics and human side of the house - our investment philosophy is buy the people first, idea second. We require existing management to stick around for at least a year to ensure the business keep ticking, the culture stays in place, etc... Because ultimately, that's what we bought. We don't have strict playbooks for every investment, everything is tailored for each individual company. During COVID, when a lot of competitors to our companies were laying off people, we did not ask for layoffs at any one of our 20+ companies - we injected more capital to ensure everyone could make payroll. We aren't unique in this approach either. Many firms behave like this, we all, mostly, just don't make headlines.

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Posted

I'm going to stand up for Whataburger.  I've been going to one regularly here in Austin for 30 years --- probably every two weeks on average. Nothing has changed.  From what I understand, most of the Whataburgers, like the one I frequent, are owned by franchisees. 

I just worry because my dad lives in a very rural part of the country. There's a fairly decent small-town hospital about 20 miles away but the next closest one is about 90 miles away. If the smaller hospital goes out of business he and a ton of rural folks are going to be in a world of hurt. 

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Posted

I've been working in enterprise software sales most of my career.   My current employer was bought be a PE firm 18 months ago.  These fuckers a cunts to the nth degree.  I'd like to beat the living shit out of every cocksucker at the firm. 

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Posted
20 hours ago, royiv said:

United Healthcare through its Optum subsidiary is by far the largest employer of physicians in the US.

luigi-mangione-2024-12-23.thumb.webp.366991f213959470f2162065ec9549d0.webp

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Posted
2 hours ago, ChiTownDoc said:

More than fair, just had some recent arguments with Texans talking shit about Chicago and we skated around politics but those were not these Surly Texans...also, I'm pretty good at talking shit so they didn't have much to say after 10 minutes...and I owe much of my shit talking acumen to this place.  So, thank you...

"Chicago assholes" is entirely related to Whataburger and how any perceived decline or negative change is attributed to that one PE firm based in Chicago. So, it's not even all assholes in Chicago, such as yourself, to whom that epithet applies. Just that one PE firm.

 

If Whataburger changed the default condiments from mustard to ketchup and mayo I believe there would an an actual army marching north immediately.

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Posted
1 hour ago, dieucla98 said:

Currently work in PE so call me jaded. I get the viewpoint of many regarding PE firms but understand that there are a gazillion firms out there and only the shit heels are making the headlines. For whatever reason (I have my guesses), the PE firms focused on the medical industry seem to be having the most visible fuckups lately. 

There is also a huge difference between a two man "PE" team and a full fledge team of investors. The two man team here is more like a family office than a typical PE environment. You don't really have any checks and balances with a 2 man team but when the investment team is 50+ professionals, you're going to have a ton of discussion and opinions before making stupid decisions. Stupid decisions result in both scenarios but considerably less in the latter. 

I'll speak for our firm on the ethics and human side of the house - our investment philosophy is buy the people first, idea second. We require existing management to stick around for at least a year to ensure the business keep ticking, the culture stays in place, etc... Because ultimately, that's what we bought. We don't have strict playbooks for every investment, everything is tailored for each individual company. During COVID, when a lot of competitors to our companies were laying off people, we did not ask for layoffs at any one of our 20+ companies - we injected more capital to ensure everyone could make payroll. We aren't unique in this approach either. Many firms behave like this, we all, mostly, just don't make headlines.

Our funds take money from Europe.  So that means we do ESG to the 9th degree.  I also think that’s not the norm with PE.  But again, the terrible ones will stand out.  Fuck those people.  

Posted
14 minutes ago, elfenix said:

"Chicago assholes" is entirely related to Whataburger and how any perceived decline or negative change is attributed to that one PE firm based in Chicago. So, it's not even all assholes in Chicago, such as yourself, to whom that epithet applies. Just that one PE firm.

 

If Whataburger changed the default condiments from mustard to ketchup and mayo I believe there would an an actual army marching north immediately.

Makes sense.  Remember Chicago style dogs have mustard.  Not ketchup.  But PE so…all bets off.  And why don’t those assholes open them up in Chicago?  Do these dipshits even TAM?

Posted
1 hour ago, dieucla98 said:

For whatever reason (I have my guesses), the PE firms focused on the medical industry seem to be having the most visible fuckups lately. 

I would posit that mostly they try to run the  “business” of medicine like any other for profit enterprise and it absolutely is not the same. 

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Posted
11 minutes ago, Biff Tannen said:

I would posit that mostly they try to run the  “business” of medicine like any other for profit enterprise and it absolutely is not the same. 

Pretty much this - the medical industry is hopelessly complex.

Posted
3 hours ago, Brisketexan said:

Oh, I have no doubt that Texas's most abundant natural resources is idiots and assholes, and we are fully transitioning to being a resource-only economy.

But those particular Chicago assholes are indeed Chicago assholes who fucked up a place many of us loved.  This is America in 2025 dude....."abundant assholes" is our brand.

to be fair whataburger had been in decline long before they sold out to those chicago assholes

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Posted
3 hours ago, Brisketexan said:

Oh, I have no doubt that Texas's most abundant natural resources is idiots and assholes, and we are fully transitioning to being a resource-only economy.

But those particular Chicago assholes are indeed Chicago assholes who fucked up a place many of us loved.  This is America in 2025 dude....."abundant assholes" is our brand.

And we still don’t have one gotdamn WAB up here. So the hoi polloi take it in the shorts as usual.

Posted
4 hours ago, Brisketexan said:

Yep.  My wife and I recently drove by the flagship Whataburger on the bay in Corpus Christi (she'd never seen it before).  At first, she commented wow, that's an amazing location.  Then she got quiet, and muttered "fucking Chicago assholes."

People who don't usually pay attention to this shit know that PE ruins everything it touches.  Yet, we keep giving them MORE room to run, not less.

There's a better than 100% chance that some sort of PE firm ends up functionally owning at least one -- probably more than one -- of our national parks within the next couple of years....as just one example of the giant shit sandwich we're all going to keep eating.

They’re buying baseball teams and college football AD departments.

Jurassic Park Hold Onto Your Butts GIF

Posted
1 hour ago, Horn Under a Bad Sign said:

I'm going to stand up for Whataburger.  I've been going to one regularly here in Austin for 30 years --- probably every two weeks on average. Nothing has changed.  From what I understand, most of the Whataburgers, like the one I frequent, are owned by franchisees. 

I just worry because my dad lives in a very rural part of the country. There's a fairly decent small-town hospital about 20 miles away but the next closest one is about 90 miles away. If the smaller hospital goes out of business he and a ton of rural folks are going to be in a world of hurt. 

Well, see, here's the problem.  Rural hospitals provide a much needed service that serves the public good.

Not only are those bolded terms not valued any more, they are evil.  They are an enemy that must be eliminated, because they are enemies of the only "good" we have as a culture: PROFIT.  Think of all the conversations we have where people yell "the government oughta be run like a business!"  That's fucking madness, because they serve two entirely different ends.

Social Security does not and should not exist to make a profit. Neither should the FAA, or TXDOT, or the CDC, or....almost all other government entities/functions.  They exist to fulfill a MISSION AND PURPOSE.  In the case of your rural hospital, to provide accessible healthcare to our fellow citizens/human beings.  

Even when it comes to businesses, there should be some broad value in actually providing the goods/services that make up your business ethically, fairly, well, etc.  See, e.g., the Costco model.  The challenge for the bean-counter brain is that those approaches don't have a way to directly correlate them to "profitability."  Things like "having good customer service," "delivering consistent value," and "standing behind your product" don't make for easy-to-read charts and graphs showing profitability (particularly from quarter to quarter, which is the only timeframe that matters).  Yet, they are the very things that help build a long-term profitable business with loyal customers and the like.

Across society, we are being crippled by 1) short-term, and 2) me, me, and only me mentalities.  They are incredibly destructive, yet we have made them our gods, meaning that anything different, we have turned into the devil.  We are killing ourselves and everything we love, everyone sees it happening, and nobody seems to be able to do anything to slow it down, much less stop it.

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Posted

IMO Private Equity is just the essence of american idividualism, but applied to capitalism. Every business entity they interact with or come into ownership of is just another resource to exploit. There's no downside to fucking them over, because you'll have moved on to the next thing before they realize you drank their milkshake.

That ethos of "fuck the next year, we gotta fix the next quarter!!!" and epidemic of short-term thinking is what got us here. But by the same token, that sort of insane and dangerous risk taking is exactly how you become a billionaire and join the ranks of the "elite". So it's no wonder why every business-brained asshole doesn't give a shit about consequences, if you do things right you won't have to worry about the consequences.

It's certainly working for elmo so far. He's taken tens of billions in losses and it literally doesn't fucking matter. He still has the keys to the kingdom and the ear of the mad king

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Posted
7 minutes ago, Captainant said:

That ethos of "fuck the next year, we gotta fix the next quarter!!!" and epidemic of short-term thinking is what got us here.

(The?) one good thing about private equity is that they specifically do NOT care about quarterly figures to keep Wall Street shareholders happy (because there are not any of them). There are plenty of problems with private equity but blaming them for the short-term thinking that the stock market encourages is definitely not one of them.

 

Posted
10 minutes ago, pantone159 said:

(The?) one good thing about private equity is that they specifically do NOT care about quarterly figures to keep Wall Street shareholders happy (because there are not any of them). There are plenty of problems with private equity but blaming them for the short-term thinking that the stock market encourages is definitely not one of them.

"Longer term than one or two quarters" does not mean that it's not short-term thinking.

Buy, extract all value in a relatively short time (a few years), leave behind an empty husk/sell off the body parts to recover your investment -- those are just some versions of the play.  The play is NOT "buy and hold, and build it into a well-run, profitable enterprise that can be in business for decades."

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Posted

Single-family home prices have risen by 47.1% since 2020, and the average cost to rent a single family home has increased by 30%. This is in large part due to private equity's growing influence in the housing market.Aug 12, 2024

The WallStreetApes post said “new reports show economists have been lying to all of us about the rate financial firms have been buying up all single-family homes.” It continued by saying in 2023, private equity firms purchased 44% of all single-family homes in America. It said that “means death for our middle class.”

Private equity firms are again expected to buy another 44% of single-family homes in 2024, according to the post. By 2030, private equity firms would own 60% of all homes in the U.S., it said.

image.png

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Posted
1 minute ago, Satchel said:

 

Single-family home prices have risen by 47.1% since 2020, and the average cost to rent a single family home has increased by 30%. This is in large part due to private equity's growing influence in the housing market.Aug 12, 2024

 

The WallStreetApes post said “new reports show economists have been lying to all of us about the rate financial firms have been buying up all single-family homes.” It continued by saying in 2023, private equity firms purchased 44% of all single-family homes in America. It said that “means death for our middle class.”

Private equity firms are again expected to buy another 44% of single-family homes in 2024, according to the post. By 2030, private equity firms would own 60% of all homes in the U.S., it said.

image.png

Yep.  We have shifted to becoming an extraction economy.  That USED to mean we extract oil, gas, and minerals from the ground for profit.  Today, we are extracting dollars from people, adding no value in return -- just like when we suck oil out of the ground, the ground doesn't get any benefit.

Human beings exist to serve as sources of revenue at every turn.  Extract the maximum amount of dollars from them when providing them with basic needs such as 1) food, 2) shelter/housing, 3) healthcare, etc.

How much blood can you siphon out of their body?  Note that the question is NOT "how much blood can you siphon out of their body while leaving them still healthy."

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Posted (edited)
22 minutes ago, Satchel said:

 

Single-family home prices have risen by 47.1% since 2020, and the average cost to rent a single family home has increased by 30%. This is in large part due to private equity's growing influence in the housing market.Aug 12, 2024

 

The WallStreetApes post said “new reports show economists have been lying to all of us about the rate financial firms have been buying up all single-family homes.” It continued by saying in 2023, private equity firms purchased 44% of all single-family homes in America. It said that “means death for our middle class.”

Private equity firms are again expected to buy another 44% of single-family homes in 2024, according to the post. By 2030, private equity firms would own 60% of all homes in the U.S., it said.

image.png

My wife and I are actively looking for our next home - we've lost an offer to an investment buyer because the seller was a flipper. The winning bidder (that is buying it just to lease it) didn't care about broken glass blocks in the master shower, and the seller just wanted to move the property off their books. Fuck a family that wants to buy their next home for the next 10-20 years amirite

Plus that dynamic has the added benefit of discouraging negotiation with the seller, since they truly don't give a shit. They just want their money back and don't care if they're leaving any landmines for the next owner. If you put in any contingencies or any asks it makes your offer vulnerable to someone else who just wants to put their money somewhere 

Edited by Captainant
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Posted (edited)
26 minutes ago, Brisketexan said:

"Longer term than one or two quarters" does not mean that it's not short-term thinking.

Buy, extract all value in a relatively short time (a few years), leave behind an empty husk/sell off the body parts to recover your investment -- those are just some versions of the play.  The play is NOT "buy and hold, and build it into a well-run, profitable enterprise that can be in business for decades."

As others have said, that's not actually what Private Equity is or does. I mean, SOME do. The slash-and-burn firms that give the industry a bad name and maybe that is the problem-- laymen like you come to think of PE as the easy to digest narrative that non-banking American's can readily understand and have probably experienced (e.g. ToysRus, etc.) and so it becomes shorthand for all PE firms.

Historically PE firms make money in a turn-around or in implementing whatever the individual PE's good at doing (e.g. Finance- cost takeouts, tightening up DSOs or O2C or whatever, Operations- automation, operational efficiencies, SKU rationalizations, fixing processes). It's supposed to be a win/win, everyone is happy and makes money-- the owners, the bank, the shareholders, the employees, the customers. On paper that's supposed to be how it works. Ultimately the goal is to take the risk, work without the pressure of the Street, and then have a positive exit.

It doesn't always work and actually there is a bit of, I won't call it a crisis yet, but some strong headwinds in PE with the horrible M&A and IPO markets of the last few years. Inflation, interest rates and now tariffs are horrible for PE business.

Bloomberg had a good article today actually how even PE is trying to get out of the PE business (or at least the equity part): https://www.bloomberg.com/news/articles/2025-03-19/private-equity-firms-are-getting-rid-of-their-equity

Edited by Vegas64
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Posted
2 minutes ago, Vegas64 said:

As others have said, that's not actually what Private Equity is or does. I mean, SOME do. The slash-and-burn firms that give the industry a bad name and maybe that is the problem-- laymen like you come to think of PE as the easy to digest narrative that non-banking American's can readily understand and have probably experienced (e.g. ToysRus, etc.) and so it becomes shorthand for all PE firms.

Historically PE firms make money in a turn-around or in implementing whatever the individual PE's good at doing (e.g. Finance- cost takeouts, tightening up DSOs or O2C or whatever, Operations- automation, operational efficiencies, SKU rationalizations, fixing processes). It's supposed to be a win/win, everyone is happy and makes money-- the owners, the bank, the shareholders, the employees, the customers. On paper that's supposed to be how it works. Ultimately the goal is to take the risk, work without the pressure of the Street, and then have a positive exit.

It doesn't always work and actually there is a bit of, I won't call it a crisis yet, but some strong headwinds in PE with the horrible M&A and IPO markets of the last few years. Inflation, interest rates and now tariffs are horrible for PE business.

Bloomberg had a good article today actually how even PE is trying to get out of the PE business (or at least the equity part): https://www.bloomberg.com/news/articles/2025-03-19/private-equity-firms-are-getting-rid-of-their-equity

I hear you, and I surely have both a "visibility bias" (we see/notice the failures/crashes, we don't notice when things hum along at a functional level), as well as some personal experience with some cases (financial wheeler-dealer types putting together deals that were structured ENTIRELY to earn massive fees.....leaving the actual entity so burdened with debt that the amount of debt it was taking on had to include enough money to pay.....the payments on the debt, because otherwise, there's no way it could make the payments, and similar bullshit schemes that would have fucked over everyone, including the business.....while the dealmaker types and preferred investor types made out like bandits).

I've just seen too much shit to ignore.

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Posted
2 hours ago, DigglerontheHoof said:

I've been working in enterprise software sales most of my career.   My current employer was bought be a PE firm 18 months ago.  These fuckers a cunts to the nth degree.  I'd like to beat the living shit out of every cocksucker at the firm. 

I was living in Austin and consulting with Dell when Francisco or TPG or both did the Dell Boomi deal and everyone freaked out. This thread had me wonder how that was going as I hadn't thought about that in a while and it seems like, from googling, fine I guess? 

But to your point, PE is coming in to make changes and that usually sucks if you were comfortable and/or had it good. But I have heard great things about Thoma Bravo as a tech software PE buyer.

Posted
30 minutes ago, Brisketexan said:

"Longer term than one or two quarters" does not mean that it's not short-term thinking.

Buy, extract all value in a relatively short time (a few years), leave behind an empty husk/sell off the body parts to recover your investment -- those are just some versions of the play.  The play is NOT "buy and hold, and build it into a well-run, profitable enterprise that can be in business for decades."

Exactly this. They are still motivated by short term gains and I would argue even more destructive than public corporations because as long as they get theirs in the timeframe they established, they fuck over everyone in their way. 

Posted
3 minutes ago, Vegas64 said:

Historically PE firms make money in a turn-around or in implementing whatever the individual PE's good at doing (e.g. Finance- cost takeouts, tightening up DSOs or O2C or whatever, Operations- automation, operational efficiencies, SKU rationalizations, fixing processes). It's supposed to be a win/win, everyone is happy and makes money-- the owners, the bank, the shareholders, the employees, the customers. On paper that's supposed to be how it works. Ultimately the goal is to take the risk, work without the pressure of the Street, and then have a positive exit.

That's allot of words to say "enshittification". PE forces a business or entity to stop caring about quality, experience, history, etc etc, in favor of profits and profits alone. It reduces EVERYTHING to dollars. Society needs more than just dollars to be healthy.

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Posted
1 minute ago, Brisketexan said:

I hear you, and I surely have both a "visibility bias" (we see/notice the failures/crashes, we don't notice when things hum along at a functional level), as well as some personal experience with some cases (financial wheeler-dealer types putting together deals that were structured ENTIRELY to earn massive fees.....leaving the actual entity so burdened with debt that the amount of debt it was taking on had to include enough money to pay.....the payments on the debt, because otherwise, there's no way it could make the payments, and similar bullshit schemes that would have fucked over everyone, including the business.....while the dealmaker types and preferred investor types made out like bandits).

I've just seen too much shit to ignore.

To your point, I assume you are an honest lawyer who is good at what you do and you extract some amount of money at 1/6 hour increments for the good of your customer, your firm and yourself. I assume most lawyers attempt to operate in this way.

I also understand that the law profession has some less than honest firms who work in the margins or outright do unethical things for a buck. The slash and burn firms, who get the bad press and give the laymen the impression of lawyers are liars and morally suspect. The same impression that gives us the tome of lawyer jokes found next to the book of aggie jokes.

Posted
2 minutes ago, Captainant said:

That's allot of words to say "enshittification". PE forces a business or entity to stop caring about quality, experience, history, etc etc, in favor of profits and profits alone. It reduces EVERYTHING to dollars. Society needs more than just dollars to be healthy.

Precisely why it is a horrifying model for medicine. Brisket said it upthread, but when you take quality of patient care out of the equation, what are we even doing?

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Posted
1 minute ago, Captainant said:

That's allot of words to say "enshittification". PE forces a business or entity to stop caring about quality, experience, history, etc etc, in favor of profits and profits alone. It reduces EVERYTHING to dollars. Society needs more than just dollars to be healthy.

Definitely agree there is some of that.

But there are also some very complex and bloated organizations that can be more efficient and optimized, while keeping more or less the special sauce (e.g. quality, experience, etc.) which just means that, like most things in life, it's about the fit and the time and place. PE shouldn't be the blanket answer for everything, but it has a role.

I actually think we see a pullback of PE (I read last week that PE deals have actually declined in recent years, contrary to the perception that PE is manifest destiny'ing all the business) and anyone following finance and news has seen the trend is actually in private credit.

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