You may wonder
why in a world where a trillion here or a trillion there does not seem to
matter too much, while many of us and our governments etc. seem to be so
chronically short of the readies.
What is a
greater mystery is why some of the figures seem to be fine and dandy and moving
in the right direction, so much is going in opposite direction and never to return.
One
major explanation is here in the LSE Business in a full article on Private
Equity and the way money is moved these days, by whom and to what purpose.
It may make
the eyes ache at times but if you can take it, you will have learned something
useful. It is titled: "How Private Equity Firms Are Designed To Earn Big
While Risking Little Of Their Own".
This is the
way it ends, quote:
Conclusion
The PE business model is designed to funnel income from portfolio
companies and PE funds upwards to the PE firm. With so little of their own
money at risk, these firms make outsized bets that pay off in good times.
In bad times, they make money on the steep management fees paid by
investors and monitoring fees paid by portfolio companies. Like the house in a
casino, PE firms never lose.
Unquote.
One example is
that just about anyone with a leasehold property will playing in the game only
picked for the losing side.
No surprises, but an interesting article.
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