[joegibbs]

PE are vultures: vultures feed on dead animals, not healthy ones. You don't sell off a successful, thriving business to be gutted and restructured because you're going to make much more money keeping it going the same way.

"Private equity backed companies are 10 times more likely to go bankrupt than public companies." - is this because they're running successful companies into the ground or because the kind of companies that get eaten up by PE are the ones that are failing anyway?

[plorkyeran]

A lot of PE acquisitions are companies with would have otherwise trundled along not making any money but taking a very long time to go bankrupt, with the PE firm pushing them much faster towards bankruptcy. There is a causal relationship between a PE acquisition and going bankrupt, but nonetheless you’re right; obviously companies which are bought by people who buy failing businesses have worse outcomes than public companies.

[chii]

> PE firm pushing them much faster towards bankruptcy

the PE firm pushing them to do something drastic, but low chance of success, in the hopes of turning the fortunes around.

And there's nothing wrong with that imho - if it was going down, might as well chance a lottery ticket. The people who lose money are the PE investors, who knew the risk coming in.

[infotecht]

I think a more apt comparison is to fungus -- it can be part of a healthy ecosystem, rotting and breaking down old growth. It can also take hold of an otherwise healthy host long before its natural end, and just like with our bodies and food we take steps to mitigate that.