Serious question: is there a single example where the customer experience has improved after private equity took over?
This is about providing life-saving care, not Toys R Us.
And this whole topic is specifically about companies in the business of livegiving care. Hospital ER's.
Hospitals in those areas tend to not offer as high quality of care as most urban/suburban hospital.
When the only hospital in an area closes, it's not just a matter of going slightly farther out for care. In many cases, it's just not possible for people.
This is a big issue with the idea of socialized health care as it could happen in America. Right now we already have a two (or three) tiered healthcare system: one for the "rich" meaning urban and suburban and one for the "poor, remote, and/or rural".
When people talk about socialized health care they rarely if ever talk about how to keep such a system from getting worse.
So when a rural hospital closes down, you can expect a higher death rate in the local population. Not to mention the economic impact of losing what is probably the highest paying employer around and all the fallout that comes from that.
Source - have sold my business to PE and have advised on 900+ companies who have sold to PE firms.
Literally anywhere is better than just hand waving the parent statement away with nebulous, unverifiable claims of your own experience.
https://www.ta.com/portfolio/investments/
It's possible you're right as I'm also speaking based off vibes, but my argument remains the same. Those who sell out for a quick payout would eventually fall into the category of "the current owner is unable to continue to run the business and cannot find a successor" when they hit retirement age and their kids would prefer easier/safer/higher general market returns.
Also, see my comment below. Feel free to list out all of the companies from those portfolios that match your criteria. I'll wait patiently.
I mean so is every owner, whats your point?
This is such a weird argument...
He is going to retire sooner or later and what then?
There is a cultural paradox where it's socially unacceptable to profit too much from a necessary good or service, but you can profit as much as you want from non-necessary goods and services. In the past, this pressured small practices to keep their service standards high and prices relatively low. However, due to the accessibility of information and finance, rather than start your own medical practice, you can become similarly wealthy with half the work just by being employed as a doctor/dentist and investing your money in an ETF. Of course, people with money swoop in to "correct" the mismatch in supply and demand, which leads to worse service and higher prices.
The knee jerk reaction people have towards these situations is to "punish greed", but that doesn't change the underlying market forces. Much like rent control, it may work in the short term but makes the problem worse in the long term.
> Usually when a company sells to private equity, it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option.
private equity being able to offer more money for your practice when you retire than a dentist who would have continued the small practice is not financial hardship or being unable to find a successor, so please don't pretend your two comments are equivalent.
This comment is much more honest: there was room for financialization, so people did it. They were unable to find a successor who would pay more than a group of people that wanted to wring money out of their company. Gives the lie to the "selling to private equity would be the least bad option" conclusion, though.
"it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option."
It should be
"PE offered by far the most money and will make up for it by raising prices and reducing service"
That's exactly what happened with that dentist practice. For years I went there, got a cleaning and was told "keep doing what you are doing". After the takeover they found some problem with almost every visit and fixing it coincidentally would have cost exactly the $1500 my insurance was covering each year.
I use ASP for my pool cleaning and they referred me to their electric company (Mr Sparky). Both have been excellent services and I was able to receive a discount on Mr Sparky, because of the existing relationship with one. Seems like a win:win for everyone.