Why Private Equity SUCKS for (almost) Everyone

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Almost everything we consume has been touched by private equity at some point in the value chain. Despite that, very few people even know what private equity is. In this essay, I criticize the magic sauce that private equity firms use to create “value”.
First, I talk about how this magic sauce - on dubious grounds - transfers wealth from investors, such as our pension funds, into the pockets of a few private equity partners.
Second, I talk about how private equity makes portfolio companies focus more on financial engineering and consumer exploitation, and less on actually improving their products and services.
Third, I talk about how private equity seeks to reduce market competition, right under the nose of our competition regulators.
★☆★ If this video helped you please leave a LIKE, write a comment on this video, and Share it with your friends. Subscribe to The Market Exit on RU-vid and click the 🔔 icon to receive notifications for more videos.
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In this video:
0:00 Introduction
01:39 The Magic PE sauce (what is private equity)
04:11 The PE billionaires (why private equity partners go to work)
09:06 Private equity "value creation" (the bluntest instrument capitalism has to offer)
12:53 Stealth consolidation (the private equity nomenclature)
16:16 Conclusion (let's get personal)
17:40 Thank you message and shout-outs
🔔 Subscribe to the channel to watch more eye opening videos! www.youtube.com/@TheMarketExi...
=================================
Who am I?
I’m Andres Acevedo, a lawyer who make short documentaries about law, economics and fairness for my own channel, The Market Exit. You can help me make videos for The Market Exit by becoming a Patreon. Or, if you live in Sweden, you can Swish me a donation on 123-333 34 65.
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📱 Instagram: / themarketexit
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🌐 My personal webpage: andresacevedo.com
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💌 Email: hello@andresacevedo.com
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★★★ You might also be interested in:
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#privateequity #value #money
Thanks for watching the video: Why Private Equity SUCKS for (Almost) Everyone

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2 июн 2024

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Комментарии : 657

@dexterm7666 Год назад

Production level is top-tier. Explanations are easy to understand for an average retail investor like me. New subscriber here 👍

@marwenbenhadj6878 Год назад

He is amazing 👏

@tommatthieen5017 6 месяцев назад

im working in the industry. unfortunately there are a lot of innacuracies in it

@sam-fb1ds 6 месяцев назад

I second this

@black_tech_owner 6 месяцев назад

@@marwenbenhadj6878😮😮😮😮😮😮😮😮😮😮😮😮

@veerkar 6 месяцев назад

@@tommatthieen5017- agreed. The analysis of PE investments is pathetic. The video is simple to understand and well produced. But the content is garbage.

@bobbobertson7568 2 месяца назад

Spot on. I work for a company sold to PE. They followed the playbook of layoffs and gobbling up many other small companies in the biz. And the people that survived got rewarded with double the workload. The scum bag management tried to motivate the flock into thinking we were an upstart company, but in the end they sold us out to a bigger competitor. They of course raked it in via stock options and other rewards. If you get acquired by PE there will be tough times ahead for you

@beatonthedonis 6 месяцев назад

In the UK, private equity firms have bought up most of the care homes and many of the vet clinics. Care homes are now immensely expensive, the level of care is terrible, and when they go bankrupt, the state has to bail them out. Vet clinics are also immensely expensive, with or without insurance, and prone to recommending unnecessary treatment in order to make money

@TheMarketExit 6 месяцев назад

Thanks for sharing. We see that development in country after country, unfortunately. Having a dog, I've seen first hand what the aggressive consolidation has done to the vet clinic markets. There is far from enough competitive pressure left to keep the big firms from increasing prices.

@LzLam 6 месяцев назад

I'm working in the m&a advisory field in China and deal with or for a lot of the buyout funds from day to day. What you presented is largely correct but I have to say you presentation quality is insane. Not mentioning the phenomenon visuals, the storyline design, pace, the skill to simplify concepts but keeping the essense are all top tier. I'm honored to be one of the early follower to a million subs to be channel.

@TheMarketExit 5 месяцев назад

Thank you, I'm really glad you liked it!

@edisonyi1188 10 месяцев назад

One correction, the Oxford paper states that the performance is the same as public index funds after fees are deducted. So you can't claim that due to fees, returns on PE are worse than benchmarks.

@Itssconnorr 7 месяцев назад

This guys biases throughout the video are so blatant that I can’t tell if he’s doing it on purpose or he just didn’t do sufficient research for this video.

@johnsmith-ro2tw 6 месяцев назад

I saw a study once, about the avg return of hedge funds in the USA. It was pathetic. It was like -1%, when the S&P500 was returning 8-9% over the same period. Wouldn't be surprised if net returns were the same for PE firms. Especially if in the net return calculation, you include the number of staff laid off. I mean, you need to look at the whole equation to derive the net returns. It's like those idiots who claim an EV pollutes less than a petrol car. It's true if you only look at the finished product over a short period of time, but if you include the pollution generated with the extraction and shipping of lithium, the relatively short life of batteries, etc... petrol cars are still a better option for the environment. I imagine the top management of businesses acquired by PE firms is lured with insane amounts of quick profits that make their eyes shine, and is naive, at best.

@SeanPannella 6 месяцев назад

@@johnsmith-ro2twI would be very surprised if any of these do better than just buying a few low fee ETFs like VOO or IVV. These PE balance sheets are going to pooh with interest rates the way they are. Investment advisors are likely much more interested in capturing and locking in decent returns from bonds or using an ETF like TLT to get that exposure without having to manage a bond book. On top of all of this if they were considering risky investments like PE then they should have just put all of their money in NDX tracking ETFs with ~18.7% average annual return over the past decade and fees would be in low bps. Problem is a mix of incompetent investment advisors in charge of these sources of investment and stakeholders chasing exposure. Everyone focuses on the success stories like early investing in META or TSLA another thing PEs often have is high concentration risk.

@gillima20 6 месяцев назад

Going on what is written here on the The Oxford paper, it seem to comparing local stores and affiliated franchises. PE is higher risk with locked in investment with magic rollup Sause including the growth and benefits it has. Index funds have the protection of the market so in and out in a day. Seems to be not enough competition in PE to push down there 2/20 rates. Perhaps higher interest rates with cause PE to be reluctant to deploy there raw - powder so quickly.

@12345fowler 6 месяцев назад

What's your real argument there except just a baseless rant over his video ? @@Itssconnorr

@DawnPatrol101 Год назад

I enjoyed the video. But as a PE investor I have to disagree with your editorial opinion and offer a couple of counterpoints: - Private equity is an important source of capital for small and medium sized businesses too small for public markets but too big/mature for venture capital. The maturity of the US Private equity markets plays a large part in driving growth for middle market companies/new industries as compared to the relatively nascent EU PE industry. - The paper cited that shows returns for PE and public equity are the same are net of fees. To say they return the same but PE charges higher fees on top of that is false and is double counting. In any case, even if they were the same returns, PE returns are less volatile and uncorrelated with the broader market which plays a large part in attracting institutional investors despite the higher fees charged - Industry consolidation is the natural progression of the industrial life cycle and is healthy for growing companies. Economies of scale is a business 101 term. Of course some transactions will fly under the regulatory radar, they only care if a transaction results in monopoly power. Market power does not equal monopoly power - most failed LBOs are a result of Pe firms buying out and trying to save already failing businesses. While I cannot deny its ugly when it happens, these investments lose their investors money and the Pe professionals are likely to be out of a job as well

@JohnSmith-si8nz Год назад

Agreed100% the video is politically tinted as fuck I am a private debt investor myself Also the 2% fee structure is disappearing, we are seeing 1.5% being market standard in Europe and 1.0% for debt funds

@cowboydelnorte3078 Год назад

Thank you. A very negative view of the PE industry. This is what the media does, lump everyone together because of the horrors of LBOs and the 80s and 90s of KKR etc PE firms bring expertise to grow scale then exit the investment. Lately it’s been holding the investment. If anything watch out for the hedge funds there’s some dark ones out there that dabble in arms dealings and sources out of Suriname. I’ve said more than enough if PE was so bad why is it still here? Why is Bain a prominent firm doing a lot more than the gov in communities?

@Viipxz Год назад

I’m in the private equity space as well and I find it unfortunate that so many people have such a skewed perspective of the industry, viewing it as purely evil.

@Bambotb Год назад

how do you get funding from them ?

@KingRo550 Год назад

Amen. Thanks for saying this. I’m a fellow PE investor

@kevinjohn8365 Год назад

You are truly underrated. Level of production is off the charts. Love this ☺

@TheMarketExit Год назад

Thank you for the kind comment Kevin John!

@TheMarketExit 6 месяцев назад

I'm thrilled to see this video resonate with so many of you. Let me share a bit about myself: 👨‍💼 I'm a lawyer who discovered a passion for using videos to explain things I think people should know. If you think I should keep doing this, consider supporting me on Patreon at www.patreon.com/themarketexit Obviously, there are nuances to private equity that I couldn't cover in this relatively short video. While I stand by everything I say in this video, I do agree with (and have learned from) some of the points that have been raised in the comments. I read all the comments, and I appreciate them all, even if I haven't had time to respond to all of them, yet. I'm actually working on a potential long form film about private equity, if you become a Patreon supporter, you'll find more information. Lastly, if you enjoyed this video, you'll find a lot more - even better stuff - on my channel, so do please check that out. Thanks!

@Lodeken 6 месяцев назад

You have gotten yourself a new sub, amazing production quality and very clear explanation 😃

@nathansamuel222 Год назад

Was intrigued by the title and was immediately very impressed with the level of editing and video production for the number of subscribers you have. Completely agreed with your message as well. Keep it up!

@TheMarketExit Год назад

Thank you Nathan! I will keep making my videos better and better and hopefully the audience will follow

@halsokampen3600 Год назад

Thanks for another great video! This is whats happening to the gym industri in Sweden at large and also In my town of Gävle. Recently we had around 5-7 different gyms owned by small buisnes entrepreneurs that where all bought by one private equity company. This is really hurting the entrepreneurship in our town and also limiting peoples choices and most people are oblivion to the fact that this is happening.

@TheMarketExit Год назад

I completely agree with you -- I've seen the same thing. If you look at for example SATS, one of the biggest PE-owned chains in Sweden, they're taking state-of-the-art price discrimination techniques to the next level. It's just amazing the amount of effort they spend tweaking their pricing system to get people to pay as much as possible. Thank you for your comment and for watching!

@Andreas1986xyz 7 месяцев назад

Were the owners forced to sell? I guess not.

@halsokampen3600 7 месяцев назад

Ofcourse not! They where paid to hand over their keys. But the problem is What it does to the market and comsumer choice.

@12345fowler 6 месяцев назад

That's not the point. I guess nobody ever thought that was the case thought.@@Andreas1986xyz

@erics2792 Год назад

The returns on the funds themselves largely depend on the sector of which the fund operates within (Infrastructure, real estate, generalist, tech, life sciences, etc) It is also less volatile than the public markets, though you sacrifice liquidity for time, most pension funds, universities, investment institutions are looking 10-25 years ahead and want to mitigate any cyclical risk. Yes financial engineering happens within these firms for target companies, but so does restructuring and growth within the company itself. The consultants are typically deal sourcing, the lawyers are required for the filings needed to acquire a company (in the states). Multiple expansion rarely happens anymore besides in the tech. But yes, you're correct about the regulations, it is limited. Loved the video.

@jasonfan54 Год назад

This one of the best produced videos I've seen in a while and I love the focus on finance - although I disagree on some of the points you made in the video - I really hope you continue to make videos like this. Absolutely top tier.

@TheMarketExit Год назад

Thanks! I do indeed plan to keep making videos. New stuff coming out next week, stay tuned :)

@ambig1 6 месяцев назад

The huge private fund managers like pension fund etc., usually have their own consulting companies in the name of their immediate family members and the PE firms are asked to hire few of their consultants, in this way the fund managers get kickbacks for their business via their family members. The main beneficiaries here are the fund managers who get kickbacks, their only condition is it should meet at least the stock market returns.

@coisasbostas1648 Год назад

This is some Netflix production level, such a good and clear explanation, you're going to blow up soon! Keep going

@TheMarketExit Год назад

Thank you! That's one of the nicest compliments anyone could give me. I watch at a lot of Netflix documentaries to get inspiration for the graphics, style etc -- even though RU-vid content is different -- here you must earn every single second of the viewers' attention.

@makeaniiimpactYT 19 дней назад

You hit the nail on the head where we've seen the same 'money saving' tactics to offshore to cheap low-quality tech resources but then remove all the high-ticket high-value employees/consultants that can actually build and innovate to make themselves look more 'profitable'. We know a company that almost missed the boat of AI when they laid off everyone who could actually integrate AI (except for our team). Luckily this is what we are doing now, but their off-shore teams couldn't come close to the level of experience and even the headhunter said, there's no way we can replace our dev team with the budget they were limited to...anyway, of course the execs are "Gen AI experts" now and touting this as they continue to look for another PE to buy them out. Another company didn't keep the good tech designers and devs around as PE said to just off-shore it all. 18 months later, they went against our original plan, failed to execute and removed their India off shore team to go offshore to central America...as that is the strategy. "Just off-shore the product design and build" - Whether you have A-players or D-players on your team, building a successful new software product doesn't happen with a room full of builders. There are def some PE that do the right due diligence and want to grow companies with actual good experience and collaboration. It's just like house-flippers, some are good, many are just looking to make the quickest $

@garretttedeman Год назад

Really, really oustanding piece here. These are exactly the points many have been trying to make for years, but here are well-articulated & presented. ...Bravo to the creators!

@TheMarketExit Год назад

Thank you very very much Garrett for the kind comment!

@Wa7edmenalnass Год назад

The research in this video and the production value is unmatchable. Great work.

@TheMarketExit Год назад

Thank you Ahmed! Very kind of you

@TERROR-FPS Год назад

Great video. For context I’ve work in executive search for PE and have done for the past 10 years. Giving me a deeper level of access. The vast majority of your video is correct the one aspect I would say needs changing is PE returns vs public returns, the vast majority work in multiples of 100% , eg the trajectory of the fund is 6x meaning 600% returns which is very different from public market returns. And another darker aspect you forget to mention is the “private” in PE a lot of these businesses move In the shadows and like it that way, I believe the PE industry holds close to $7Tr AUM it’s crazy that their names do not ring bells to the everyday person and why is this! Anyway great video!

@TheMarketExit Год назад

Thank you for your comment Nick! I agree with you that the opaque nature of PE is a major problem and that it's something I could have talked more about in my video. On some level, the lack of transparency is the underlying reason for why PE "gets away" with what I call the PE sauce and its ingredients. A problem also seems to be -- and many talk about this -- that many large investors seems to not scrutinize their PE investments enough, if at all. Re. your comment on returns: I find Mr. Phalippou's arguments in his paper convincing -- it would be interesting to hear your thoughts about that paper. But I also realize this is a hotly debated and contentious topic and I did, therefore, include a disclaimer that I believe the PE compensation schemes are unjustifiable even PE returns exceed other asset classes. Thanks again!

@TERROR-FPS Год назад

@@TheMarketExit I’d also love to see an in-depth video on large PERE businesses snapping up single dwelling homes.

@dac8939 Год назад

Hi am looking to break into PE. Currently associate in RE fund management but making around $180k and 28. What would pay be if I was to take a role. As starting analyst, or could I transition to associate level. Would this be a pay cut and what level could I get up to. Background undergrad in Mathematics and finance from top Russell group university in UK and MBA from Wharton. Currently in London. Thanks

@TERROR-FPS Год назад

@@dac8939 sorry for the late reply, I’m actually London based too, so happy to have a conversation. Do you wanna drop your name and I’ll find you on LinkedIn?

@allNamesAreTaken333 Год назад

@@dac8939 Ironic :D Best of luck to you :)

@WilliamWatrous Год назад

Can't believe the algorithm recommended this channel. Would angel invest into your success if possible 🥂

@TheMarketExit Год назад

The Algorithm works in mysterious ways. Thank you! 🍾

@vagifrzayev280 Год назад

I would VC invest into your channel 🛩

@vink75 Год назад

Excellent video! I was looking for some background on PE as I'm exploring its impact on healthcare. Which as far as I've been able to gather (still early in the research) has been terrible. Anyway thank you, your video was very helpful.

@davids7879 Год назад

Excellent content! I like the fact that you mention at the end the importance of "creating something new". This can't be stressed enough today.

@TheMarketExit Год назад

Thank you David! Yes, I've been thinking a lot about the difference between creating value in your work vs. shuffling wealth around in your work. I'm trying to come up with a good angle for a video about that, but it's difficult to find a good approach. If you have any ideas, I'd be happy to hear it :)

@davids7879 Год назад

@@TheMarketExit Awesome! Nice to hear that. hmm... i've been thinking alot about identifying and solving problems lately. I'm still in the early stages. hmm... Perhaps Maybe a video about how the best companies solve the most difficult problems. People are motivated by solving difficult challenging problems. So, running with your "special sauce theme" We need a "new special sauce" to solving problems and identify the best ingredients to go into that special sauce. LoL I Hope it helps.

@TheMarketExit Год назад

@@davids7879 That's good -- I like that a lot. There is a lot of discussion on how "problem solving skills" will become increasingly important for young people entering the work force. But there is little talk about which problems should be solved.

@adfafdasdfasfa 7 месяцев назад

Love the videos. As a person with a similar background I appreciate the production value and balls it must have taken to step away from the industry!

@jsg0170 Год назад

The production level of this is insane for 3k subs. Keep this up and the channel is gonna blow up massively

@TheMarketExit Год назад

I will keep making videos for sure :) Thanks for commenting!!

@benfowler1134 Год назад

Excellent video -- and criminally underrated channel. It dovetails with my own personal experience of watching past employers and everybody around then get raped by unscrupulous PE firms, and I do think from experience that PE is one of the greatest social ills of our time -- they are like a plague of locusts that have descended on our high streets and employers. I cannot help but wonder if we need leaders who can call it out, and then attack the problem head-on through much more aggressive competition enforcement -- and resourcing that fight adequately.

@TheMarketExit Год назад

I agree with your view. But I believe the problem is deeper than just PE. In my view, PE is the logical result of raw capitalism and laissez-faire government. Thanks for you kind comment! :)

@ruxuesim3043 6 месяцев назад

Hey, you’ve just got another subscriber. The production quality is amazing and informative. I’m not sure why you do not have a million subscribers by now. Wishing you the best of luck and get your break really soon. Looking forward to more videos. 🙏🏻

@TheMarketExit 6 месяцев назад

Thank you very much for your kind words. I'll keep making videos irrespective of how many will watch them. This is just way too much fun

@justmeajah 5 месяцев назад

@@TheMarketExithappy to hear this passion!

@beeman1408 6 месяцев назад

You got yourself a new subscriber. And yeah that's a pretty good description of what is happening in companies that are owned by private equity. Us blue collar folks are nothing more than a resource for them akin to forklift and handheld scanners.

@ChristophTempel 6 месяцев назад

Thank you so much for making this topic easy to understand. As many people as possible need to be aware of this parasitic industry.

@timeismoney9450 Год назад

Insane production and content quality. Can't wait to watch your channel growth.

@TheMarketExit Год назад

Thank you my friend!

@nicola3240 Год назад

Thank you so much for this video! Really insightful and interesting. Already recommending this video to my friends and colleagues. I think your channel will go far. Subscribed.

@TheMarketExit Год назад

Thank you, appreciate that :)

@12345fowler 6 месяцев назад

Very interesting, I wish I viewed this about 15 years ago when I held an accountant position in a private equity firm - the highest I was ever paid, and all what I was doing doing was photocopying financial documents because the whole of the accounting was outsourced to some prestigious accounting firm specialized in private equity in London. I had no idea what they were doing and how they were going to do it. They have been washed by the 2008 financial crisis tought.

@minhduc1997 Год назад

This vid is so good. Super well documented! Subscribed!

@TheMarketExit Год назад

Thank you very much!

@kenarthur6253 7 месяцев назад

I've worked for a company owned by Private Equity company. Sucks. Just care about the money. Kills employee morale, and the good people leave

@sylascoker1483 Год назад

The cinematography was so good, as long as the information!!!

@TheMarketExit Год назад

Thank you very much Sylas, I did spend a lot of time getting all visuals right so its great to hear that you liked how it looks

@floaterof17 6 месяцев назад

capitalism without failure is like religion without hell

@szymontauszynski1944 Год назад

Very nice material, liked both the content and the editing. Keep it up man!

@TheMarketExit Год назад

Thank you!

@basstradamus1 6 месяцев назад

I like the content and the form of this video so much thanks and keep bringing more content with the high bar of quality. Good luck!

@marcocanzian5227 7 месяцев назад

I have read most of the comments; I have to add a few points. - Fees. Yes, the fee is high and the returns could be very high too (very high). A successful PE firm seriously impacts the wallets of its investors. The expertise and money they bring to smart businesses is the juice they need to scale or to recover from past bad management to then flourish gain. - What if something goes wrong? What happens to the PE firm? The PE firm will risk closing and its partners will not be welcome in another firm (which means that they have to think of a new job if not even a new industry). Then there are a lot of variables.

@monaoconnell5650 8 месяцев назад

Thank you so much. Please keep the videos coming.

@__ag 8 месяцев назад

Absolutely amazing video, thanks!

@AlexanderLandolsi 10 месяцев назад

Loved this! Thank you Andres

@TheMarketExit 8 месяцев назад

🙏 thank you my friend

@KuzzatAltay Год назад

Great video, learned a lot. Subscribed. Thanks!

@TheMarketExit Год назад

Thank you very much Kuzzat! Welcome to the channel. Unfortunately I don't speak Turkish, so I don't understand the content on your channel. But it looks great, really nice cinematography!

@matthennessey6223 Год назад

Amazing video! Keep up the good work

@kentinspacetime5378 Год назад

Excellent excellent work! Now all I have to do is to try and understand “business development companies” and why or how they aren’t private equity.

@EsaMononen 3 месяца назад

Thank you for making this video. Its well-made.

@TheMarketExit 2 месяца назад

Glad you liked it!

@guillesrl7569 Год назад

The 'professional fees' like accountants, environmental consultants, lawyers etc. that bill by the hour, are not payed extra by the investor. Those fees are payed either by the sponsor, i.e. they come out of the management fee already payed, or are part of each asset investment. Other than that your video had great production and synthesis to a complex topic!

@cowboydelnorte3078 Год назад

Facts. The 1st piece about the for-profit school I’m yea. Buy them out haha it’s a pos school not focused on education but profit haha. And very few PE firms borrow from the bank.

@jordanf8326 Год назад

If the sponsor doesn't close the deal, the investors eat the cost. If the deal closes, then the DD costs and expenses are just capitalized and paid by the company. Think of the management fee as the sponsors' income/salary and it is paid by the Fund investors. Fees the sponsors' charge the individual companies are offset against management fee.

@exoticclan68 Год назад

The editing is AMAZING

@audioalt8 Год назад

Absolutely fantastic video. Probably the most important message that everyone doesn't know they need to hear.

@TheMarketExit Год назад

Thanks! Send it to some people you think need to hear it :)

@audioalt8 Год назад

@@TheMarketExit Keep it up! I will subscribe on Patreon!

@mazterz Год назад

There is nothing inherently wrong with PE. Anyone can borrow money and apply the same technique to purchase a small business. In fact, in many ways the industry is a plus, as it provides an exit for many entrepreneurs and business owners. Here is the problem: The early LBO practitioners made incredible returns as the market was nowhere near as competitive as it is today. The key driver of returns to an LBO is the level of debt. They were able to borrow a significant portion of the purchase price and still be able to afford the interest payments; in your terms, the debt was not "back-breaking." However, today you have so many PE firms vying for the same companies that the purchase prices have been driven very high. The PE firms' high returns depend on being able to borrow the majority of the purchase price but, because of the higher prices, the company is not able to meet its debt obligations. Best case scenario: The PE firms slashes and cuts costs (tends to make society unhappy) to meet interest payments. Worst case: Company goes bankrupt. Just like every investment, competition erodes returns, and the PE firms are not willing to accept lower returns and take on less debt. PE can be great if it applied correctly. The real problem lies with the banks who are willing to fund these deals where the pro-forma statements are stupidly optimistic and unlikely to develop.

@TheMarketExit Год назад

Good points Markus. I agree with you that many of the negative aspects of PE are to a large extent driven (or at least enabled) by the approach adopted by lenders. But also, and perhaps more importantly, by the lack of proper scrutiny by the investors.

@vincentorlando6767 Год назад

The comment sounds like someone who works in PE, or rather LBO. The video here is accurate regarding PE firms greed and destruction of businesses and industries. LBO's(PE firms) were created in 1980's to strip out assets to the benefit of investors and PE executives. Check out the move, " other peoples money" with danny devito......

@mazterz Год назад

@@vincentorlando6767 When people criticize PE firms, they are criticizing buyout funds...AKA. LBO practitioners. Venture capital and growth equity are also forms of private equity but are used by companies to raise capital. I'm not exactly sure what your point is? My point is that if a company goes bankrupt (or employs drastic measures to avoid bankruptcy) then coverage was too tight to begin with

@vincentorlando6767 Год назад

@@mazterz My point is your comments indicate you are very pro PE industry. This video shows the true nature of PE firms. PE is part of VC industry, and yes they have different strategies...buyout, RE, growth, VC. The video points out after all the various expenses totaling like 6 or 7%, not just the 2% management fee, the returns do not justify the investment when compared to other investments

@mazterz Год назад

@@vincentorlando6767 I'm not anti or pro the industry. We aren't talking about returns (which historically have been comparatively very good) - the video mostly talks about the process. There is nothing wrong with the process. It is in its application at scale in a competitive environment where things can go south

@ferminlizarraga4368 Год назад

Thanks for the video. Its great and really speaks out

@TheMarketExit Год назад

Glad you liked it!

@bogsieevans Год назад

Really great video!! Shared with friends/colleagues 👏🏼

@TheMarketExit Год назад

Thanks Paulina!

@Dealmaker84 6 месяцев назад

thank you for your clear explanations!

@neilerickson3158 6 месяцев назад

I feel that at the core of your presentation is the age old phenomenon of greed vs fear. Is this the trap door through which even the most brilliant enter? Those caught in survival are more easily forgiven. Thank you for your brilliant insight and cognizant commentary, very courageous.

@klaslundgren1817 Год назад

Very nice production! I usually find political and economical subjects boring, but this video presented it in a very informative and fun fashion 😀

@TheMarketExit Год назад

Klas, that's a very kind compliment, thank you so much 🙏

@alucky0 Год назад

Amazing stuff here. Glad I found your channel and hope more others do soon

@TheMarketExit Год назад

Thank you very much Alex! I'll keep working hard to make better videos and hopefully I'll find an audience

@aussiedeals5363 Год назад

This is gold, thank you!

@TheMarketExit Год назад

Glad you enjoyed it!

@markthani9883 Год назад

Great video! Incredible quality!

@TheMarketExit Год назад

Thank you, I really appreciate your kind comment

@mradjamesable Год назад

First video of yours I've watched. Fantastic!

@TheMarketExit Год назад

Thank you! Welcome to the channel

@franktfrisby Год назад

Very nice work. Keep up the good work.

@user-is3lb6ru6l 2 месяца назад

Very good Video! Superlative production, graphics and facts.

@TheMarketExit 2 месяца назад

Glad you enjoyed it!

@Madafaca6969 Год назад

what the hell, did the algorithm showed a great video? that's a first time lmao awesome video, of course subscribed!

@TheMarketExit Год назад

Thank you very much! Appreciated

@supratikhajare8733 Год назад

Great explanation ! Thanks for the video.

@TheMarketExit Год назад

Glad you enjoyed it!

@Emdebe 6 месяцев назад

Great video. Really well done 👏🏼

@tradefact7508 6 месяцев назад

You need to keep doing this as much as you possibly can, you are exceptionally talented at both production and content delivery. well done!!

@TheMarketExit 6 месяцев назад

Thank you very much!

@andreatortella9993 Год назад

Incredible video !!! Thank you

@TheMarketExit Год назад

Thanks! :)

@brandoncarpenter9681 Год назад

Well done, keep it up if you have a passion for this!

@TheMarketExit Год назад

Thank you very much Brandon! I do have a passion for this and I intend to push hard to get better at this

@victormutta1115 5 месяцев назад

Wow, the algorithm has done you dirty.With this level of production quality, your channel should be WAY bigger.

@TheMarketExit 5 месяцев назад

That's very kind of you. I'll keep making videos :)

@RichardL1 6 месяцев назад

Great content, thank you!

@langeboriskogen Год назад

Important and interesting. Looking forward to the next video!

@TheMarketExit Год назад

thank you!

@kingamplify8904 Год назад

As someone who is planning on going into private equity, this is an amazing video, extremely high quality production and information, subscribed!

@TheMarketExit Год назад

Thank you KingAmplify! Good luck with your career in PE, it's competitive but rewarding if you make it

@onlydivergences Год назад

I am inspired by your work. Thank you for doing what you do.

@TheMarketExit Год назад

Thank you! I will check out some of your videos as well. Cheers!

@ShaKing_037 Год назад

Thanks for the wonderful Presentation bro 🔥🔥🔥

@yoladamoyi9801 Год назад

This is so fire👍👍great production too!!!

@TheMarketExit Год назад

thank you very much!

@benp9442 Год назад

This is probably the video that will cause the channel fly high Very interesting channel the algorithm recommended to me. Will now watch all the other videos on here :)

@TheMarketExit Год назад

Thank you Ben! Keep your expectations about my earlier videos on a reasonable level though -- I've developed a lot since my first video ;)

@KeydriaTheMage Год назад

Love the editing and production quality, maybe lower the text noises a bit, they’re kind of distracting at points for me, others may agree. Cool video though, thanks!

@TheMarketExit Год назад

thank you very much! I appreciate the sound improvement suggestion, I will keep that in mind for the next video for sure. Sound mix is something I struggle with

@FutureBusinessTech 4 месяца назад

The editing of this video, combined with its exceptional educational value, is astounding.

@TheMarketExit 4 месяца назад

Thank you very much and congrats on the success with your channel. I could learn a lot from you. You make really cool documentaries

@razellgaming4644 2 месяца назад

The production quality, the animation, ease of understanding concepts, the music all is top tier He is seriously underrated This video really helped me with my project You have gained a sub my friend

@TheMarketExit 2 месяца назад

Thanks! Good luck with your project. Send me a link?

@girlafraid4045 5 месяцев назад

great stuff. still learning. i'm sure you avoided getting too deep in mud, but i'll go there. i always wondered why there was not more of an uproar from all the "private" business's during lock down. they just took a year of two off while their smaller small business competitors were decimated and/or gobbled up.

@ronnywilliams3302 Год назад

I learned A LOT. Thank you man

@TheMarketExit Год назад

That's great! :)

@user-tg2jc7lk8n 9 месяцев назад

This is an extremely polished video. Well done

@TheMarketExit 8 месяцев назад

Thank you!

@jpminetos Год назад

Great quality man!

@BaLthaZaR2105 6 месяцев назад

Beautiful looking video with an important message. Thanks for this.

@hardstylelife5749 Месяц назад

Great presentation, very nice graphic and editing skills; as well as the concept explained, easy to digest for even the less knowledgeable, bravo

@omarmadian4264 4 месяца назад

Production and Explanation are on Professional Level

@Bernoulliflyer Год назад

Very interesting. Thank you.

@Noobfantasy 6 месяцев назад

Thank you for this informative video brother

@maboo736 Год назад

The leveraged buyout model is extremely strenuous on a company’s balance sheet since debt is collateralised by assets and revenue. It’s done to benefit just the few executives that get a big payday. Interest repayment alone would make the running of the company be on hard mode.

@SCYLDUP Год назад

And the executives are not held liable for the failures or debts even though they are in control and get all the benefits. If it wins, they win. If it loses, they are immune. Lovely world isnt it?

@johnsmith-ro2tw 6 месяцев назад

Fun fact : there are businesses specialized in trading debts. They employ high profiles similar to PE firms profiles (former ministers, big 3 consultants, MBA guys, etc...). They buy debt, restructure it and sell it. THey make tons of money, just like those PE firms. So, even when the company acquired by a PE firm is left with a ton of unmanageable debt, there is still a way for some other sharks to make more money. Not sure who's left holding the bag eventually. My guess is : the taxpayer when the gov is involved to help.

@12345fowler 6 месяцев назад

Revenue is not part of any balance sheet so I don't know how it could collaterise anything.

@Batmanananana 6 месяцев назад

Great vid! Very interesting!

@AITails2030 Год назад

This video is so beautiful. Keep up the good journalism my friend.

@TheMarketExit Год назад

Thank you very much Kinghtly! Making my videos as beautiful as possible is indeed a key goal for me. :)

@user-wr4yl7tx3w Год назад

Very informative. Great content

@Martin-qb2mw 6 месяцев назад

If you invest in leveraged micro caps (i.e. what PE firms invest in) and your performance turns out to be equivalent to S&P 500 then you underperformed massively on a risk-adjusted basis.

@privateequityguy Год назад

One of the best ways to build your fortune - buy an existing business. Second best is starting a fund.

@Tracertme 6 месяцев назад

It’s modern language for venture capitalists and asset stripping.. because they became a dirty word… these firms invest with other peoples money or your pension fund to be specific. Then exit the firms once they have milked all the value they can by covering their own exposure first.. it’s nothing new. The super smart management is called management fees…. 😅

@f.d.5952 6 месяцев назад

❤❤❤ thank you! Great video! Very brave 👏

@JosueGarcia-ve6zc 6 месяцев назад

How is this channel so small?! This is amazing work, instant subscribe

@swirlcrop 6 месяцев назад

det här är en väldigt bra video Tack, tack.

@TheMarketExit 6 месяцев назад

det här är en väldigt vänlig kommentar, TACK!

@ranterraver5959 6 месяцев назад

Great video, can’t believe it took so long to pop into my feed. Already liked, subscribed and shared.

@TorbenCASchwartz 5 месяцев назад

Great video. Keep up the good work

@TheMarketExit 5 месяцев назад

Thank you!!!

@allNamesAreTaken333 Год назад

Amazing video and super important topic

@TheMarketExit Год назад

Thank you!

@justmeajah 5 месяцев назад

Amazing videos! Wow! New subscriber here 🎉 so refreshing to see something outside of the us where many finance youtube videos are based on!! This video deserve millions views!!!!