I would argue that PE often makes things better for the consumer in the sense that they often buy businesses that are going out of business.
When the 65 year old sole proprietor of a local HVAC business sells it to a PE firm, the other option was likely winding down the business. If the owner had children that were interested in running the business, no doubt they would give it to them. But usually that is not the case. So the owner needs to sell. And if there were capitalized, enthusiastic local entrepreneurs that could buy it, no doubt the owner would consider them. But again, this is quite rare.
So the choices usually come down to: close up shop or sell to a PE firm. All other things being equal (which they never are), I think a market with more businesses is going to be more competitive and pro-consumer than a market with fewer businesses. Further, some economists have found that PE activity encourages business formation, perhaps partially explaining why the US has more small businesses per capita than Europe (where they have far less PE). So it's a double whammy: PE causes less businesses to close and more businesses to open.
Yeah but they're boring. Hilton, Skype, and Dell are PE success stories. PE, when they're not being egregious, makes the website go down a bit less? Support improves? Security and compliance gets a bit more spent on them and they land more enterprise deals? Hardly the stuff to counteract taking down everyone's beloved Toys'Я'us with leveraged debt.
Sure, in the case of private equity rollups in HVAC and electric and plumbing you often get higher rates but professionalized systems including real contracts, phone answering, emailed invoices, real quotes, real terms, enforceable warranties. Many who have trusted vendors may view this as degradation because of the cost increase but for others (a new homeowner with a job), the professionalization is a positive.
For software like Zendesk that was already thoroughly professionalized, I agree, it's hard to think of positive attributes to a PE buyout!
When the 65 year old sole proprietor of a local HVAC business sells it to a PE firm, the other option was likely winding down the business. If the owner had children that were interested in running the business, no doubt they would give it to them. But usually that is not the case. So the owner needs to sell. And if there were capitalized, enthusiastic local entrepreneurs that could buy it, no doubt the owner would consider them. But again, this is quite rare.
So the choices usually come down to: close up shop or sell to a PE firm. All other things being equal (which they never are), I think a market with more businesses is going to be more competitive and pro-consumer than a market with fewer businesses. Further, some economists have found that PE activity encourages business formation, perhaps partially explaining why the US has more small businesses per capita than Europe (where they have far less PE). So it's a double whammy: PE causes less businesses to close and more businesses to open.
A short, entertaining article on this topic: https://www.economist.com/business/2026/02/23/rejoice-privat...