Private equity explained

Private equity funds are groups of investors that flip companies for a profit. It's the technique they use that makes them special, as Paddy Hirsch explains. #MarketplaceAPM #PrivateEquity #Investing
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[@Deen_WestYorkshire]

My learning style is aligned with your delivery. Really enjoyed this.

[@roin71]

I was going to say the same thing

[@SergioRomano-nj8eb]

One of my biggest financial eye-openers was realizing the potential of private equity as both an investment and a management strategy. It's fascinating to think about how private equity firms acquire companies, improve their operations, and eventually sell them for significant profits.

[@Colbe-lx7fb]

Timing is everything in the investment world, but understanding private equity requires more than just timing; it takes strategic planning and expertise. Consulting with a financial advisor is invaluable in this regard-they can help you decide whether private equity fits your investment goals and risk tolerance.

[@V.stones]

I’ve been in touch with a financial analyst ever since I started exploring alternative investments. The challenge in private equity is knowing which opportunities are worth pursuing and how to manage risks effectively. On my portfolio, which has included private equity investments yielding remarkable returns, my advisor carefully evaluates each deal’s potential and outlines clear entry and exit strategies.

[@Kattyol1]

No, I’ve mostly managed things myself, but it’s starting to feel like too much to handle.

[@V.stones]

Joseph Nick Cahill is a name that stands out. He’s a highly respected figure with extensive experience in private equity and other investment strategies. I’d suggest looking into his credentials; he’s a phenomenal resource for anyone aiming to understand and navigate the complexities of private equity.

[@Andres_853]

Just ran an online search on his name and came across his websiite; pretty well educated. thank you for sharing.

[@PatrickOSullivan-h3q]

I'm from Birmingham united kingdom 🇬🇧, The difference Mrs Nessah Haremza makes in my life is second to none it's differently a life changing kindness. I really appreciate her effort in my life.

[@maxwellkaterina7563]

Thanks for continuing updates I'd rather trade the stock market as it's more profitable. I make an average of $34,500 every 2 weeks even though I barely trade myself.

[@ShannondoraHerder]

I'm favoured financially, Thank you Jesus $10,200 weekly profit regardless of how bad it gets on the economy.

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I'm from Vietnam 🇻🇳 I and two other of my friends tried her immediately we testified her performing wonders.

[@RobbHexRoberto]

How..? Am a newbie in crypto investment, please can you guide me through on how you made profit?

[@MadalenaLourenço-l8u]

Thanks to Mrs nessah

[@Tubeytime]

Beautifully explained, the power of art shines forth once again

[@Ronniek-lo8pw]

Saw a lot of luxury car owners say they do this.

[@smritibasnet9782]

Lol tiktok?.Me tooo hahaha

[@davidrigby1409]

Same

[@raymondsierra209]

Sameeee 😂😂

[@isuruanjana7972]

LoooL 😂😂😂 i camr from tik tok

[@mrdjoudjou9892]

Same

[@chernobyl169]

You skipped the part where private equity doesn't actually make improvements to the asset. Instead, they strip it for liquidity, use that cash infusion to pay off the bank, then try to sell off the unsustainable husk of a company to a gullible buyer for an extra cash-out.

[@SDMev1982]

I shouldn’t have laughed but I did.

[@Wittgenstein.]

Instead that usually the gullible buyer is another PE company, which in turn sells it to another PE company, and so on, leading to Housing Crisis.

[@CSDragon]

Not a gullible buyer. They IPO and put it up on the stock market for tens of thousands of gullible buyers

[@ericthered9655]

Sounds like the people who would benefit most would be monopolists who want to get rid of competition without triggering an antitrust action.

[@indigo_0]

oh, kinda like live nation

[@MadameMacgyver1291]

Playing monopolists also means - if the company is in the rock, they will do internal acquisition. Exit from right pocket, enter from left pocket.

[@TheFuriator]

It's exactly like this, in real-time.

[@malynaph7683]

I am French and was looking for a deep explanation of private equity in French language (as I don't really master English). Watched your video and found out that I understood better your explanation in English than 100 French websites I read. THANK YOU SO MUCH !!

[@dissmr]

baby girl.. your English is sweet. I dont speak French.. but I DO kiss that way. ))

[@sammy2551]

If you are french, I am Swedish

[@TheMoumou120]

​@@dissmr 🤌

[@softwarerevolutions]

bonjour

[@lookoutforchris]

Warren Buffet had a very good, very short description of private equity: close to fraud.

[@muzammil_babar]

De Niro teaching us is a blessing.

[@ThisisRealTreasure]

So good to see KZbin recommend a 12 year old video.. i remember watching these back in the day!

[@tinabanda3072]

i have developed an interest in this private equity topic and you have really helped me understand what they are all about thanks

[@吴公-h3m]

The most direct and easiest way to understand about PE!

[@mitushic]

😁

[@Exatic]

Been seeing those tik toks about people doing this for a living..... let me try and learn something real quick

[@joshuasainmervil4378]

Yoo fr 😭‼️

[@killcorona2294]

lol me 2

[@killcorona2294]

the person that has a Lambo by selling drugs is a king lol

[@yandhi4202]

LOLL same

[@vAstrozh]

Lmaoooo

[@luisarroyo8111]

Thank you for the example. The model operates under several assumptions: 1_. There will be buyers willing to buy at the "market value" (I.e. $20M). 2_. The property needs little maintenance investment. 3_. There will not disasters/sinisters impacting upon the asset.

[@Jusonomous]

The “leaves all of us needing a drink” at the end was funny asf

[@jonaswinter614]

I am from Miami United State🇺🇸, The difference Mrs Lucy Mary Liam makes in my life is second to none it's definitely a life changing kindness. I really appreciate her effort in my life.

[@macdenise3203]

I invested $2,000 and the trade in one month making close to $20,000. I wonder where she got her analysis.

[@donnadudley18]

I am from Miami United State🇺🇸, The difference Mrs Lucy Mary Liam makes in my life is second to none it's definitely a life changing kindness. I really appreciate her effort in my life.

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Seeing my broker talked on KZbin, This was exactly how I got the recommendation about her for the past years. Hit $200k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started with $20k in September 2024

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Waking up every 14th of each month and receiving $10,600 is incredible, her success story is every where

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I’m favoured, $27k every week! I can now give back to the locals in my community and also support God’s work and the church. God bless Mrs Lucy Mary Liam also God bless America.

[@swagmassa6702]

Amazing video. First guy I've seen that explains what the "Private" and what the "equity" means!

[@mr675official]

The bank don't just lend the 9 million away like that. The idea behind LBO is to use the cash generated by the target company to to repay the debt taken. The aquirer typically uses the assets of the target company as collateral.

[@dab0331]

That's true of any bank loan. It didn't need to be stated

[@milkmessiah5192]

He literally says this in the first 2 minutes, bozo

[@mr675official]

Yo moma is a bozo for having you @@milkmessiah5192

[@ken-e-ken]

⁠@@dab0331no it’s not. Banks also issue unsecured loans. Usually smaller amounts and/or with higher interest.

[@Beniamin6665]

What do you look like today. This was 12 years ago.. Time is something crazy… So cool to look back on these videos as if they were yesterday..

[@Guss425]

This is really well explained

[@valdanowill]

How am I just finding this channel? You are brilliant.

[@AbdullahZaman-tj7hp]

yes, this seems to be a good channel. I found it now too. also, check out my channel as well :)

[@udaykhatry]

I loved these videos. I was kinda confused when the first clip ended. Then I loved it after the second video ended with a drink.

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[@oluwapoloorejayeoba7949]

I couldn’t understand this until I watched this video. Good job👍🏼

[@ahmedsyed8975]

Misleading explanation. It's not private equity, it's private DEBT, because all of the money invariably comes from pension funds or banks or other institutions which is the money of normal people. The people handling the money don't put any money up, they have NO equity in the deal. Neither the banks nor the pension funds nor other institutions. It's not THEIR money they are putting up, it's YOUR money they are putting up and calling their equity. It should be called private debt if they were honest.

[@anthonyferris8912]

They don't 'streamline'. They strip and load the company with debt.

[@ThomasLi4017]

This is the ideal situation, but not that all can succeed.

[@randomgrinn]

How does that make it more valuable for a sale? Doesn't make any sense to me.

[@anthonyferris8912]

@@randomgrinn It doesn't make sense.

[@PrincessLenoir]

I'm confused as to why they're able to sell the property for twice the buy value when they've sold off half the land and torn down buildings. Wouldn't it be worth less if there were less grounds and fewer buildings?

[@jaydenjanshego6978]

I kno can't be the only one here from TikTok

[@quagmire1130]

Yeaaaa you got me there

[@MegaJimbob125]

Yep saw a few people with nice cars saying they were into private equity. Came here to learn what is was 📝

[@mysticgamerent]

Nah bro

[@lilblondeboy4142]

Lol

[@ocularpatdown]

It’s parasitic and harmful

[@A_A_K_123]

Who is the idiot that buys the stripped down company for $20M? That is the real question, isn't it?

[@Nagroddy]

Another PE group buys it, holds it for a few years and dumps it for $28m

[@TonyMidyett]

Workers MUST own and control the means of production.

[@iamcase1245]

Marxist doesn't work in the modern world. Marx did a shit job at predicting technology.

[@Chimichanga5666]

They can. It’s called "being a shareholder"...

[@seer775]

@@Chimichanga5666 the workers won't ever own enough shares to influence decision-making.

[@robertortiz-wilson1588]

Fantastic presentation! Very easy to follow! Thank you.

[@billnolan5375]

Not all income investments are created equally. I've allocated my capital in a safe and sustainable way but still leave room for excitement for individual stocks, cryptos and new exciting opportunities!

[@noelstout3056]

@Joe Robert. I firmly believe everyone striving for financial independence should own both stocks and real estate. The percentage weighting of each asset class as part of your portfolio will then be up to you to decide. At least with stocks, when the market is plunging, you can sell, albeit at a loss. Lots of people couldn't sell their real estate, couldn't afford to sell in 2007-2011.

[@rohitmajumdar1579]

@Sean Roger I'm aware of Frost Hilda, how long has he been handling all these investments and how has he enhanced your earnings?

[@natashawalton8545]

Not every is able to identify lucrative positions to earn from

[@elenarossini9230]

@Sean Roger dn

[@suhailakhoonable]

Excellent explanation

[@Kittiesinclair5]

3:45: the pe is not ‘investing in a co that goes bust’. The pe is MAKING the co go bust and sucking out as much money as it can before leaving workers with nothing.

[@omnium_gatherum]

That's what he's saying, that it could go either way. He's basically saying PE could either help the company or make it go bust

[@luisarroyo8111]

The challenges for me in that model are: 1_. Rural and urban properties do not have the same demand. 2_. The higher the value of the house, the limited will be the pool of buyers. 3_. In the future, people will opt for smaller properties rather than having bigger mortgages. It's already happening in the main capital cities. 4_. Banks borrowing availability fluctuates on cycles depending on the interest rates.

[@3deeanimator633]

What do you do for a living??

[@hcn6708]

Pilfering

[@ecomstories]

Nice Video! Thanks for explaining!

[@vicahmed221]

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[@vicahmed221]

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[@rosekaplan219]

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[@STEV0-o3e]

I am 15 years old what would you tell a young kid like me to do so I can retire before 30. Thanks

[@pacedeli24]

​​​@@STEV0-o3e hey young man I'ma teach you a quick strategy I want you to go get a job for five years put 10% of your money into the 401K think about 401ks as a retirement fund the only way you can get that money is if you turn 65 or if you leave the company the reason why you want to put 10% in there because some companies will match you anywhere from 3% to 10% on the money that you put and it that grows over time so that's free money you get on top of the money you're saving so let's say you're 20 years old you live with your parents to you 25 you put 10% of your income in the 401K they match it 4 or 5% let's say around five years your fund has $30,000 now before you get excited you got to pay the federal they take about 10 to 20% you have to pay the state they take about another 10% so that's that leaves you with 25,000 now you can learn how to invest in that five years of working with your job find another job take that 25,000 and invest it appropriately and you can retire by 30 if you made the right investment choices that's just one way hope this helps you go get them I believe in you the reason why you do this because you need money to invest this is a way to get Capital without having to borrow

[@Jez1963UK]

Why oh why are there always these shitty fake cyber conversations about some 'investment advisor' who is really great and, oh, here's her name etc??? Can't we all see that this is some kind of scam????

[@abhinavitsmebellamy]

Thank you, Sensei!!

[@enigmatv99]

Great breakdown of private equity! I've also explored how rare artifacts and fine wine are part of the ultra-rich’s secret investments. They’re fascinating because they combine passion with serious returns. Thanks for shedding light on this!

[@hadassahbass1371]

So good! Really enjoyed your explanation!

[@kylekane5727]

Thank you for this... As someone that is going into healthcare I better understand this now.. .. im third year pre-med and hoping to have a private practice to not have to directly deal with being in the hospital so much.

[@munyaradzimushato9102]

Well presented, simple and straight forward. Thank you

[@hardstylelife5749]

That was really easy to understand and assimilate, thank you :)

[@m_timil9352]

best teacher on yt

[@jubjubgurl]

This was a really good explanation, thank you!

[@Cowicide]

Now here's some scummy details he left out: kzbin.info/www/bejne/jIa2aYVpfd99j5o

[@richardmagasy2970]

PE fund is not a synonyme for LBO fund. What you're talking about is a Buyout fund. PE is an umbrella term that includes VC, FoF, hedge funds etc.

[@toomanyfrogs6702]

A hedge fund is not a private equity. You are completely wrong. VC is PE. Hedge funds, PE, etc are considered alternative assets but hedge fund does not belong under private equity

[@jameshuh8362]

@@toomanyfrogs6702 yup, but even then, some LPs like to separate out VC from their PE book

[@mrityunjoynath7673]

Great concept, great video.

[@Aliancey]

PE can also initiate an IPO on the share market, purchase heaps of shares thereby driving up the price of the shares. From there they entice others to buy the shares and when the company reaches over priced levels, the PE investors sell the shares to those who are still buying, make huge profits and walk away from the investment. Those who are left, lose their investment as the value of the company collaspes. This is a ruthless investment scheme that causes huge job losses and economic disruption. This is what happened to Dick Smith.

[@jordanf8326]

This is NOT what PE funds do. Fuck, you really are stupid. The majority of PE deals are not public companies.

[@NigelMadzorera]

That’s really fucking illegal 😂😂

[@vferraz88]

best teacher ever

[@coinstacks2455]

Great job thanks for the info.

[@theultimatereductionist7592]

How about the private equity firm employees or wtf they are called do the actual work, labor, jobs of the companies that they acquire >50% ownership in, support unions of those workers, etc and then - only after all that - at the end - if they make a profit - exit.

[@peterponcedeleon3368]

Excellent

[@luisfernandes2522]

I never get tired of the punch line at the end !

[@Beardedlady71]

you make it very easy to unedrstand - well done. i'm sure the PE Funds would rather maintain the mysticism around what they do!

[@Kittiesinclair5]

As I understand pe activities, the pe entity doesnt pay any loan that was taken out to buy the co or property. The pe forces the co to pay it.

[@ntulisbusiso6409]

You the best , this has just explained my curiosity on what is this PE .

[@andthenwhat3506]

Saw video of guy asking people who owned sports what they do for a living and this was one of their answers. So here i am on my way to owning a sports car. lol

[@kdcruz75]

there is a role of securitising the accounts receivables to fund the buyout ..

[@williejr71williams22]

Excellent job 👏

[@rogerkatakowski323]

You missed the Reagan/Romney PE corporate where they barrow from the pension fund to pay the investor 38% interest and often the local bank till they're depleted the company to near ruin...

[@PhuongThiThanhHang]

Love the explanation. Ever heard of Immersive Translate?? It is a tool with meticulously crafted prompts, that allows translations in the technology field become more accurate and professional.

[@EnricoSalilo]

Very good and clear explanation.. Thank youuu..

[@TonishaAmos]

Great explanation! Thank you!

[@MySudheer143]

It was so nice of you to come up with such an example. Thank You!

[@shars.555]

Right to the point! 😊 Why do they 'streamline' the acreage? Do they sell it separately?

[@surrealentertainment9558]

Thanks my guy.......very well explained

[@wasanfan]

thank you so much for your v valuable explanation !! Where were u before !!

[@SimonChengHK]

Thank for expand , working in K. K. R. Capital before still not really sure they spend lot of $€£ , however silver lake and T.P.G is the most competitive P.E. firm

[@georgejsbrown]

Is this the same with cars, planes and boats and luxury items

[@95brickhaus14]

So, legal criminality

[@guildsfordbrothers6095]

While many private equity fund managers are ethical, Steve Feinberg's private equity fund is what caused school teacher retirement money to bankroll U.S. black rifle manufacturers. It was his company that made the Newtown gun.

[@ApartmentTrusteescom]

Nice explanation.

[@financeabcs]

If you can explain something complex in simple terms then you truly understand it!! Enjoyed watching your video!! 😎

[@onetamer]

Super clear 👍

[@chancenchoices9983]

Thank you so much for the video. I want to learn more

[@superman83080]

Greatly explained

[@yakkyuu12]

That was very good -- EXCEPT; What has BEEN happening with mutual funds, pensions and MORE -SO CALLED "professional" people who WORK for the investment side of YOUR pension is the FOLLOWING; Since this IS PRIVATE equity investing pensions and others -- HAVE -- invested in companies that give VERY high DIVIDENDS in return for the pensions money-- now pensions get a "so called" GUARANTEED dividend RETURN to HELP make it easier for pensions to make investment goal RETURNS. The BIG PROBLEM is; The HIGH dividend is GIVEN for a BAD REASON--- the company is a SERIOUS "JUNK" status debt company -- MEANING -- THE MAJORITY of BANKS and OTHER lending institutions --- WON'T RISK their MONEY on lending this BAD company --- ANY MONEY--- NONE! The Company-- KNOWS they have a "junk" status rating and a BIG, BIG, PROBLEM raising CREDIT lines and LOANS to STAY in BUSINESS! So--- they CAN'T get MONEY from NORMAL "LENDING institutions-- thus they go to ---- PRIVATE LENDERS-- PROMISE a VERY HIGH interest rate on the money THEY BORROW! The PENSION( the lender) DOES DO-- the due diligence -- but KNOWS the RISK of DEFAULT on the money -they LEND( YOUR ---- MONEY!!!) is VERY HIGH! Pension lenders and others, DECIDE--- if they lend and the default happens -- they have ownership of the DEFUNCT company and they just SELL the pieces( as described in the video). The BIG problem is the LACK of being ABLE to KNOW with ANY certainty--- the LENDER ( pensions and other lenders) --- will they GET ALL their money back on the SALE of the pieces! The BIGGER sharks, Goldman and JP Morgans-- just sit-- REFUSE to make ANY offer and wait and wait-- until NOW -- the lender CAVES in as they NEED to get a CERTAIN amount BACK to keep from just losing -- BIG MONEY! The Big sharks wait until the deal IS ON THEIR TERMS! The PENSIONS and others who ALL TOOK risk for the BIG dividend--- now SELL -- for PENNIES on EVERY dollar they gave AS PRIVATE Equity Lenders! To make this WORSE-- there is NO recourse for pension holders or other mutual fund holders AND ANNUITY holders as the FIDUCIARY responsibility is NOT applicable and they CHOSE the risk! JUST another reason to REMEMBER--- this is YOUR--- PRIVATE DEAL -- NO insurance, NO SEC -- to file charges! ALL you have is the PROPERTY or parts of the business( described in the video). The POSSIBLE BUYERS of YOUR --- PRIVATE DEAL --- ALL --- KNOW THIS(the Goldmans a nd JP Morgans)!!! AFTER 2008 crash --- there are A LOT of companies -- just TREADING WATER and DON'T QUALIFY for ANY bank loans. This has become a BIG business because of this! The TERM --- "JUNK BOND" -- is NOT applied -- for NO REASON! The -- EXTREME HIGH --- Dividend PAYERS --- "TOO GOOD TO BE TRUE" statement APPLIES--- the EXTREME high DIVIDEND is BAIT for investors!

[@qq1960ify]

Excellent!!

[@alasitis]

"Sahand119" said this video was an excellent explanation of what private equity is. Well, it is a good explanation of only one sector (leveraged buyouts) of private equity. So it is a very limited and negative-even cynical-explanation. Private equity is a core powerhouse of the U.S. economy and we would not have companies like Apple and Google and thousands more if it were not for private equity companies that risked their money and gambled on someone's idea. This is a very misleading video.

[@dees900]

fantastic video...thank you very much

[@121hassy]

Woow. Top explanation.

[@vikramsd186]

Absolutely Cool Paddy ...... Thanks a Lot :-)

[@thabo1504]

Brilliant explanation!!!

[@timesmotivation7802]

Thank you! Great information!

[@susannnico]

Thanks for this amazing information !! If you don't find a means of multiplying money, you will wake up one day to realize that the money you thought you had, has finished. Investment is key, I pray that anyone who reads this will be successful in life

[@arturoborges9440]

how do private equity funds underwrite and calculate every investment? meaning, what exactly are the sheets or instruments they use to calculate IRR, Equity Multiples, Cash flows, and overall underwrite and project for every fund?

[@btw-3006]

I'm not a private equity expert, (although I'm in finance) but I assume private equity firms looks at the main financial statements (Income Statement, Balance Sheet, Statement of Cash Flows) in order to evaluate the health and growth prospects of a company. They probably vary as private equity firms are not working with public companies, but I assume that's what they look at.

[@neerajahire8091]

How does the bank just lend them that much money??? What if the PE investment fails to achieve good returns?

[@wholelottapain8130]

Mostly likely they put the asset as collateral if they failed to pay back the loan + interest

[@Tttb95]

How does the bank lend mortgages to random people for 20+ years? Leveraging up 10x EBITDA is alot less dangerous than lending to people at 30x income

[@SI0AX]

This is exactly what I needed to hear. I don't know a single thing about economics, but I have to do a project about the basics. This is much easier to understand than everywhere else I tried to look.

[@stevenlerner5515]

AMAZING VIDEO

[@pbinnj3250]

But how is the stripped down business now worth 20MM? Are the parts worth more than the whole?

[@JoãoPauloBorges-k2r]

I can understand when a manager decides to take short-term profit the compromise long-term results, such as not doing any maintenance or for going any security measures. It may increase short term returns at the cost of long term sustainability. However, I didn't understand how they expect to sell for a higher price what they bought and Stripped away some value from it

[@RajajeeSaab]

Great words thanks sir. I have a question . Do these bunch of friends who bring £1million need to form a company or something else plz say few words once. Again I really appreciate your help with this. :)

[@theflorgeormix]

excellent Paddy

[@alejandroj5249]

who does the analysis to know if that is a good investment? 1st and 2nd year financial analysts or those investors?

[@maze396]

Bruh this explanation was great!

[@TROGULAR10000]

so, the part I never understood: the company was bad in the first place, a staff layoff and cosmetic makeover takes place, and *that's* enough to make it attractive again and re-sold for more than it was bought for? What's the added value? Why the company bought again? Isn't it obvious to the final buyers that that the company is only profitable short-term because cuts have been made, that it's not on solid ground?

[@LC-sc3en]

Why would they care if the company is only profitable in the short term after their changes? They are selling it to some other dupe and taking the profit with them. They don't care about making jobs, a sustainable company, or with the house metaphor even a great place to live. They care about making the business look great and profitable in the short term so they can cash out. Much like flipping houses, a lot of times what PE does is putting in shoddy surface level improvements while cutting as many corners as possible so the person who tours it thinks it looks great and buys it at much more than it is worth. The new owners will have to deal with the shoddy duct tape foundation, termites, and the poorly installed granite and flooring. As for the buyers often PE sells the stripped down company to other PE looking to do the same. Or they sell it to the direct competitors of the company which are less invested in making a good company than buying out the competition and securing their market share. They also might sell it to an unsuspecting public.

[@blllllllllleugh]

Is a leveraged buyout essentially a corporate mortgage? Thanks

[@btw-3006]

That's a very good way of looking at it. It's basically how people buy a home. Put down 10-20%. You get the rest through a loan from the bank and then you are responsible for paying the interest and principal. If the house or corporation (in the example of an LBO) gets sold for a much higher price, they pay off that loan completely and what's leftover are the profits. I have had an interest in venture capital and private equity for some time and this video was a great explanation of what a leveraged buyout is.

[@pokechef7]

well done. thank you for this

[@jonathansridhar]

Very quick and easy explanation thanks!

[@angrophobic88]

Came here looking for some information for investment options. Every video i watch for Paddy is so enlightening, and as i'm about to make a decision to go with what i've just learned, i get hit with that its all eventually going to " Leave us Very badly, needing a Drink " . I don't know why but that throws me off the whole thing instantly! Still going to watch them all !

[@ndumisongcobo2562]

Nice man, thank you.