The International Monetary Fund warns that the private equity boom is creating new risks. It says the enormous appetite for overly-leveraged buyouts is driving up prices and will leave acquired companies saddled with debt. It also warns that some private equity deals will fail to deliver and that could be disastrous.
The US Chamber of Commerce has called on Congress to change the rules so that private equity can invest in the big accounting firms. They should remember the Billy Rose Law of Investing:: "Never invest your money in anything that eats or needs repairing". Here’s why it would end in disaster.
Private equity firms that take over companies and bring in new management teams are likely to cut jobs and depress employees' wages. But where an existing management team taked a company into private equity, there are more jobs and less wages impact.
How to prevent conflicts of interest when managers are involved in takeover bids by private equity? Here's a set of proposals from one regulator telling us what boards of directors need to do.
Real questions are being raised about the boom in private equity. There are big ocnerns about the massive debt, fees and agendas of private equity outfits and now there are warnings that private equity will be hit with its own Sarbanes-Oxley.
The boom in private equity is creating a new scam in executive pay. In many of these deals, bosses sell out to private equity and pick up millions in so-called change of control provisions, and then continue running the business.
