[JumpCrisscross]

> PE firms seem to target mediocre businesses, load them with debt, and then harvest returns and eventually the assets

Private equity no longer necessarily involves large amounts of debt, i.e. LBOs. Most managers have an economic effect they deploy to bring efficiency to an industry. The first popular one was deconglomeratisation. Then capital structure management. Digitisation and supply chain management followed. In each phase, they delivered then overcorrected.

Hospitals initially started on the scale side. The thesis was that the biggest cost centre is administration, so if you linked together the administration of many hospitals you could reduce costs compared to private practices. This initially panned out. But hospitals are natural monopolies; those initial theses were rapidly corrupted.

> given how often these businesses end up in bankruptcy

Private-equity backed companies tend to be more resilient, not less [1].

[1] https://siepr.stanford.edu/news/private-equity-firms-show-re...