Sell-to-yourself is on the rise, but who gets the best deal? | FT Due Diligence

Private equity is all about buying companies and selling them on. But as the FT’s Kaye Wiggins explains, with the economy struggling, private equity groups are increasingly turning to a new strategy - they’re selling companies to themselves. So who are the winners in this layer cake of deals, and who loses out?
#privateequity #investing
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[@IndustrialBonecraft]

This is somewhere between a ponzi scheme and insider trading under any other name. If I told anyone that I could sell someone to myself for a profit, they'd instantly recognise that as inherently damaging to the basic underlying function of competition.

[@meister-t]

sounds scammy to me!

[@osiristhehalfthehalf9907]

Ponzi scheme. There is already a name for it. Ponzi scheme, it's called a ponzi scheme.

[@edselgreaves6503]

The amount of times that Wall Street tries to dress up and glamoroize Ponzi Schemes over and over and over again even though it always ends in disaster for the rest of us, you'd think it would be illegal for channels like these to make these types of videos.

[@mastersinr]

Its uncanny how they take a shape of a pyramid

[@hendrickziegler8487]

Well - reporting on it isn't really the problem, is it? Especially as the risks are declared in the video.

[@edselgreaves6503]

@@hendrickziegler8487 The risk of faking a sale, cooking the books and lying to investors? Because that's what this video is describing.

[@joserangelrojas2573]

@@edselgreaves6503 PE firms don’t get their ideas from KZbin videos. All this video is doing it’s describing how it’s done but it’s not like we are going to see more of these schemes because of this videos

[@edselgreaves6503]

@@joserangelrojas2573 What does that have to do with anything? I said it should be illegal to make videos about this, not that a PE firm is going to get ideas about it. Sit down.

[@QuietJugung]

Sophisticated Ponzi scheme.

[@SamEbby]

Great graphics. Was a great visual explanation

[@vspatmx7458]

Also the Pvt equity companies Get brokerage for every buy and every sell. So that further enhances their revenue. Sounds like a good deal to me where only the Pvt equity company benefits the most.

[@peteradaniel]

When there’s this much ambiguity in the pros and cons of a multi billion dollar investment system, that’s a red flag.

[@SpeakHearSeeNoEvil]

Yep, sounds great. What could possibly go wrong?

[@moicapunk]

This doesn't even make sense.

[@m4inline]

The whole system is fucked

[@dzobott]

Great video. Thanks for posting.

[@caraalexandra5417]

Great stream, as always. I appreciate the level-headed approach you take to the news and the markets. . A lot has changed and that's on everything but the truth is I don't even care much about bullish or bearish market anymore because FLOYd JOHNSON y got me cover as I am comfortably making $150,000 monthly......

[@christianbooks776]

please, how do i get Floyd ?....

[@markschafer9232]

Looking for a new stock or Crypto Coins to invest in. Short Term Gains or long term. I feel it's the best time to get started on the market, heard some guy speaking of making over $5M within 3 months from a $450k capital.....

[@Adekunleabike431]

MY FAvourite T/A man, aLWAYS on the ball, honest and To the Point...

[@chrisgrudzinski6910]

I had 3 btc. I trusted his words and took his advice. I have made over 9.9 btc using his service...

[@cocacola7845]

Sounds like a ponzi...

[@eddy66t6]

*Wall Street:* "I'm in the market for something new, what have you got in a Ponzi scheme?" *Rest of Us:* *Facepalms*

[@zitaorozco3104]

That should be illegal... Is like repeating the same mistakes over and over again in order for rich people get even richer at the expense of millions if that starts to fall apart...

[@rramdohr7548]

Sounds like a Ponzi scheme

[@rostyslavkorzhov3020]

Did I just hear her saying “ponzi scheme”? Oh no it’s private equity

[@mcskipper100]

Even to a novice like me, it looked like a Ponzi or pyramid scheme, just didn't look right. Especially for the small time investors and when it all comes toppling down because of over-evaluation...It could bring the economy down

[@raglandasir6885]

Sounds like a Ponzi scheme with extra steps..

[@josephpiskac2781]

This is wide spread existing in residential evaluation refinancing and insurance banking buyout of new investment. Of course there are also completely doctored inflated portfolios.

[@MeiinUK]

It is even more shocking that, we don't actually have the knowledgeable people, OR the skillful financiers.. that pulls the strings back, and stop, or force the takeover of British mutuals.. or British pension pots.. by foreign companies.. which is what bankrupted half the country to begin with. It is still actually illegal, to employ a British citizen, without providing them an actual pension pot? Those so called "gig economy drivers" is one of those people. Uber has an actual company in the UK. Or in Ireland... they are obligated to provide a pension pot for their employees in the UK as well. So how can they get away with this triangulation situation? In fact.. people now, should NOT be able to use Uber at all in the UK? It is also weird that... the taxi drivers... do not even actually steps up and protests, cos they are liable for the insurances, and yet, their licenses should technically NOT allow them to deliver hot food as well? That itself is illegal as well ? This is whereby, again... the skillset of the people in this sector, is somewhere narrow.. and they are not aware of their own position. Cos we have now brexited. Use local courier firms. Cos the laws states clearly that.... No physical business unit, or office, then no deal. No employment contract. It is a fallacy that, the so called IR35 can allow them to ride this wave forever... And same with those gambling firms... and those media contractors.. and those games developers contractors turned... financier... Maybe it is time for the UK government to legalise what is "money". Cos all of this so called "fin tech" that has ZERO money.. is NOT money.... And Maybe the UK government, NEEDS to force these advertisers to realise this aspect as well. And as usual.. our media sector is not even caught onto this loophole at all.

[@josephpiskac2781]

@@MeiinUK Media in the United States is only Propaganda that is so thick you and we can choke on it. Look at the Ukraine War the United States, NATO and EU are completely responsible and destroying the EU energy security while Russia is branded the criminal and shoulders International Peneltites.

[@blueskyloo]

Is this like Circular Trading !!??

[@AX-sq5vm]

😂 common man always pay the price at the end

[@rudrajitghosh8257]

From 2008, the countdown begins...

[@mapryan]

Well, I can't see this ending badly at all. No sir-eeee

[@Gerry_Ouma]

🤔

[@birgirkarl]

Sounds like a Madoff plan

[@Unazaki]

This feels really wrong. While this would work if the company being internally sold is actually good, I suspect a not insignificant amount of such deals might be from funds stuck with assets that haven't performed as well as expected and not wanting to sell such assets at a loss, or at least below their hurdle values so that the dealmakers can still make their carry. In such situations, everyone is just tossing a potential grenade from 1 fund to another, in the hopes that eventually situations or performance improves enough that they can truly sell it to someone else at a decent profit. At some point, the pin might fall out and blow up, leaving 1 final fund stuck with losses if they can't turn things around.

[@m4inline]

Almost as wrong as stock buy backs.

[@Unazaki]

@@m4inline Nah, I can at least see a reason with the stock buy backs (even if I'm not sure thats always the most productive use of cash). I think this is a lot worse and a lot more controversial.

[@m4inline]

@@Unazaki pfizer spends more on stock buy backs than primary research

[@Unazaki]

@@m4inline Oh dang now that, if true, is incredibly sad :(

[@GOKUBLACK-xq4is]

Fed printing money

[@dng992]

And people thinks crypto and NFTs are a scam lmao f tradfi

[@m4inline]

+100 upvotes.

[@aaronbirook4367]

If you pension is in PE you might wanna consider getting a second job and just cash flowing that into an index fund. PE is hit or miss

[@janklaas6885]

©️1:58

[@m4inline]

Explain.

[@lohitakshtrehan6379]

😂 clever finance

[@oncoded]

I just created a Teck, yes, Teck firm, thanks for the Tips

[@-alan--]

So when they sell to themselves; Govt gets tax money and these company are able to hold their favourite asset. Kindof a good deal, but arent they artifically increasing the price?

[@Ficonomy]

Exactly...and who is getting screwed in between ?? The public who wants to get in without understanding what is going on. Artificial price hikes are the key to inflation and inherent factors for ultimate collapse of the economic system. And when the time for liquidation comes, the owners still gain when the govt comes to their rescue using tax payers money or by printing more money which is further to be collected by high tax rates.

[@oliverstewart4459]

God the world's gone mad. PONZI PONZI PONZI

[@Max-ve5tu]

I hope the founders get a recurring sell-on fee or percentage.

[@halilozcelik1329]

Ponzi Scheme -> pay old investors with the money coming from new investors This -> pay old incestors with the money coming from new investors So looks like This = Ponzi scheme 😂😂😂

[@Calum_S]

Sounds like a scam.

[@chopinsonatas606]

legal Ponzi.... shows a recession is on its way...

[@osaabd390]

This smells of fraud

[@user-co3xl6hj3x]

UK politics & policy Hunt to bring forward tax measures in bid to calm markets UK chancellor to announce fiscal package to tackle deficit on Monday morning

[@michaelmoran9020]

Can't wait for some guy with a mao profile picture to explain how this scheme led to 1000s of people losing their homes in 5 years

[@sethodman]

Secondary funds invest in the new fund? FT journalists - you're confused I'm afraid. Not great. Also, its very fashionable to bash PE but unfashionable to focus on the good it does for the economy and the returns it provides to YOUR pension fund. The bashing is getting old.