PE doesn't create anything. They extract from margins.
It only works by having more capital to begin with.
Otherwise you wouldn't see consolidation where it shouldn't exist.
It only works by having more capital to begin with.
Otherwise you wouldn't see consolidation where it shouldn't exist.
The PE firm creates market demand for the goods/services that the purchased company used to provide at a better value to the customer.
So yes, the 'creation' is a demand which is sort of a destruction of the value that the customers previously had. In a fair market, this demand can be met. But a PE buys strategically such that this demand is not possible to satisfy because the company they purchased is entrenched in some way (regulation/monopoly).