General Discussion

I work with a fair number of p.e. firms. In the vast majority of situations we see, the alternative to p.e. Is bankruptcy.

I suppose one could argue that p.e. is a fate worse than death, but usually, the company got in trouble, often because they didn't know what they were doing, and their creditors forced them to get a p.e. firm involved as a last ditch effort to save what they all believe is a good business with long-term potential.

The p.e. firm injects capital and brings in experts as saving companies in dire straits. Yes, often that involves painful layoffs, but in most cases the company overhired or needed to take less drastic action earlier but didn't. In other words, the p.e. firm gets the bad rap for the owner's mistakes.


On the other hand, there are certainly abuses. There are situations where the company should be liquidated but the p.e. firm comes in and drains it of assets for itself through exorbitant fees and leaves next to nothing for the original creditors. They didn't really add value, they just diverted the salvage value of the company.

Too many unique situations. Just saying some are good, some are bad.

Hence agreement with regulation.