In an analysis of "European companies around their buyout event in the period 2000 - 2008," private equity was found to "select companies which are less financially distressed than comparable companies prior to the transaction and that the distress risks increase after the buyout" [1]. Critically, however, "the distress risk in private equity-backed companies does not exceed the distress risk in comparable companies three years after the buyout," and, "despite this risk increase, private equity-backed companies do not suffer from higher bankruptcy rates than the control group."
More broadly, an analysis of "17,171 worldwide leveraged buyout transactions that include every transaction with a financial sponsor in the CapitalIQ database announced between 1/1/1970 and 6/30/2007" found bankruptcy rates around 6% [2]. This isn't exceptionally high.
This is a good question! I briefly thought of the same thing after the dentist’s office I’d been using for more than a decade began having utterly terrible service. By accident (an employee sent me an email from their corporate email) I found out they had been taken over by a PE owned dental outsourcing company.
That explained why overnight their office staff became a rotating assortment of people who had no idea how to run insurance or handle any problems and the visits lost all quality.
I would love to have a resource where I could see what entity actually owns a business or company. Not many people realize that even brands like Volvo and Arc'teryx that used to mean something are now owned by companies that if anything are known for the exact opposite qualities.
More broadly, an analysis of "17,171 worldwide leveraged buyout transactions that include every transaction with a financial sponsor in the CapitalIQ database announced between 1/1/1970 and 6/30/2007" found bankruptcy rates around 6% [2]. This isn't exceptionally high.
[1] https://madoc.bib.uni-mannheim.de/31366/1/dp11076.pdf
[2] https://pubs.aeaweb.org/doi/pdfplus