What is Private Equity Good For?

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From the London Guardian:

More than half the profits generated by private equity firms in recent years have been made by piling debt onto the companies they invest in, according to a report published today.

The findings of the first annual report on the industry, designed to increase transparency and improve the image of private equity, instead provided further ammunition for the industry’s critics.

The analysis by accounting firm Ernst & Young claims that just one fifth of returns achieved come from strategic and operational improvements.

Is it reasonable to expect that these ratios would be about the same for U.S. private equity firms?

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This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

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