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Comment by belter | Hacker News Reader

Is there a case where a private equity organization has been proven not to be shady? Would love some examples.

"Warren Buffett: Private Equity Firms Are Typically Very Dishonest" - https://youtu.be/r3_41Whvr1I

There might be one case somewhere that could be found where a firm that technically counts as PE isn't shady but in general the very idea of private equity is shady so it follows that all the PE firms would be shady also.

The point of PE isn't to run sustainable businesses that provide quality products and services for customers while treating their employees well. The point is to rapidly suck all the value out of businesses by loading them up with debt, breaking laws, mistreating customers, and exploiting employees. What happens to the carcass of the business or to the customers and employees whose lives have been destroyed doesn't matter to them.

Some are good but then think about it this way, most of them look forward to leveraging debt. Which easily puts them in a position, (with for ex. the current high interest rate environment), in which they are trapped.

And ^ above we're just talking about the ones that seek long-term investment. The ones that look for a quick flip in 6-10 years? Hard to trust them

>The point of PE isn't to run sustainable businesses that provide quality products and services for customers while treating their employees well. The point is to rapidly suck all the value out of businesses by loading them up with debt, breaking laws, mistreating customers, and exploiting employees. What happens to the carcass of the business or to the customers and employees whose lives have been destroyed doesn't matter to them.

This is an overly-broad statement. Private equity just means... equity that's private (ie. not on public markets). SpaceX is technically private equity. SoftBank's Vision Fund is private equity. There might be problems with those companies/funds, but "rapidly suck all the value out of businesses by loading them up with debt" is not one of them.

No. That is not how language works. "Money laundering" does not mean putting paper bills into a washing machine. "Private equity" firms are a specific business structure besides the literal meaning.

https://en.wikipedia.org/wiki/Private_equity

"Private equity (PE) is stock in a private company that does not offer stock to the general public. "

https://en.wikipedia.org/wiki/Money_laundering

"Money laundering is the process of illegally concealing the origin of money obtained from illicit activities such as [...]"

Seems like I'm using the terms properly, and you're trying to inject extra connotations. What you're doing with '"Private equity" firms are a specific business structure besides the literal meaning' is basically the same as loudly proclaiming "all cyclists are assholes" and then walking it back with 'No. That is not how language works. "cyclists" does not mean people riding bikes. When I use "cyclists" I don't actually mean all cyclists, only the bad ones.'

Everyone at the table understood what was meant by "private equity", the term has entered common parlance. Pulling out the dictionary just makes the "whoosh" sound even louder.

So you'd be fine with statements like "cyclists are assholes", or maybe even "undocumented migrants are assholes"? After all, in both cases you could argue that you're not meant to take those groups literally, only the bad elements within those groups. This is even a pretty common refrain by some. ie. "oh I don't hate all migrants, just the ones that's causing trouble". Where do you draw the line between "it's fine to seemingly bash an entire group of people because everyone knows you're not literally bashing the entire group" and "false rhetoric"?

The implication, which is well understood, is that the "equity" in "private equity" exists in the form of investments in other companies by the PE business. No reasonable person would agree that ownership of one's own business counts as "private equity."

So SpaceX doesn't count at all. SoftBank, being a VC-like business aimed at speculation on new businesses rather than sacking and looting existing ones, is debatable.

Mm. VCs are PE firms.

Andreessen Horowitz, Accel, Lightspeed Ventures, etc. are all in the PEI 300.

PE is a bit more than just firms doing buyouts.

While I have no particular love of private equity firms, Buffett didn't actually say that in that video.

The closest thing he said was that he had seen a number of proposals from private equity funds where the returns were not calculated in a way he would consider honest.

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