Why Private Equity SUCKS for (almost) Everyone

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.
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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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★★★ You might also be interested in:
▶ • Too Good to be True: T...
▶ • Why taxes are unfair.....
▶ • Agricultural Subsidies...
▶ • Därför är matpriserna ...
#privateequity #value #money
Thanks for watching the video: Why Private Equity SUCKS for (Almost) Everyone

[@dihydrogenmonoxide]

In the UK, in addition to the care homes and vet clinics mentioned below, we're seeing the same thing with utility companies, water companies, ferry companies, being bought by private equity, and pumped full of debt at the expense of investment. That's why we have such a problem with sewage pollution! it's completely wrong.

[@jbo1588]

Also financial advisors!!!

[@dexterm7666]

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

[@marwenbenhadj6878]

He is amazing 👏

[@tommatthieen5017]

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

[@sam-fb1ds]

I second this

[@black_tech_owner]

@@marwenbenhadj6878😮😮😮😮😮😮😮😮😮😮😮😮

[@veerkar]

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

[@beatonthedonis]

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]

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.

[@popcornfilms1]

It’s the care-home level that is generating much of the bed waiting times in the NHS. In the name of profit - they’re fobbing off patients to stay in hospital beds rather than take them into the homes. It’s absolutely disgusting, yet mitigates risk for private investors. Desperately needs intervention.

[@user-em5rk5tb5b]

FYI - the earnings are called ‘carried interest’ so that partners can pay a much lower tax rate than they would if it were considered regular salary. It’s an insane loophole to benefit rich people.

[@user-vm7hs2bo2t]

this is just not true. carried interest is the bonus you earn from outperforming the hurdle rate set by your investors. This source of income is volatile and is not how the managers make their stable income.

[@user-em5rk5tb5b]

@@user-vm7hs2bo2t you literally just called it ‘income’ hahaha - so they outperformed others and got rewarded, great that doesn’t mean it should be taxed in an entirely different category than a waiter’s tips or an athlete’s performance bonus. You start with saying ‘that’s just not true’ but don’t refute the substance of anything I said

[@user-vm7hs2bo2t]

@@user-em5rk5tb5b I wasn't clear. What I'm saying isn't true is that "its an insane loophole to benefit rich people." It SHOULD be taxed as a capital gain. Its volatile with the markets. You're out of your league here. "so they outperformed others." No buddy that's not what carried interest is. The managers do not get a single dollar if they don't beat a certain return benchmark. And since the probability of beating this benchmark is in line with the market, its treated as a capital gain. The investors are already taxed on the money used in these funds. So you want to tax them twice at the same intensity (irrespective of your opinion on how much wealthy people should be taxed)?

[@user-em5rk5tb5b]

@@user-vm7hs2bo2t who’s talking about taxing the investors twice?? You think conflating fund investors with asset managers is really gonna convince me that ‘I’m out of my league’? And who cares if performance is volatile or if that’s how they make money, that’s still not a justification for differential treatment. Lots of people in the economy undergo volatility in their situation, and nothing here precludes the asset management industry from coming up with a different compensation scheme if they don’t like it. -sincerely, ‘buddy’ (no need to be a douche)

[@user-vm7hs2bo2t]

@@user-em5rk5tb5b Are you're oblivious to the fact that you wrote 'hahaha', as if I'm the one being a douche. Also yes it does seem you are out of your league. 1) What am I conflating? 2) asset managers? not to be picky but these are alternatives, so I don't know if that was just you being casual with vocab or that that's proof you don't understand much. Capital gains include inflation, which is a large reason why it should be taxed less. Your investments are also at a lower tax-rate than normal income

[@LzLam]

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]

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

[@SJ-vr5te]

Your video production quality is insane

[@kevinjohn8365]

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

[@TheMarketExit]

Thank you for the kind comment Kevin John!

[@TheMarketExit]

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!

[@danieltorrejon4303]

You should pin your comment! Nice vid 👍🏽👍🏽

[@DawnPatrol101]

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]

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]

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]

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]

how do you get funding from them ?

[@KingRo550]

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

[@bobbobertson7568]

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

[@edisonyi1188]

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]

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]

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]

@@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]

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]

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

[@coisasbostas1648]

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

[@TheMarketExit]

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 KZbin content is different -- here you must earn every single second of the viewers' attention.

[@TERROR-FPS]

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]

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]

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

[@dac8939]

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]

@@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]

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

[@Diddy1970AD]

Very well presented and explained, didn't realise so much of this was going on.

[@garretttedeman]

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]

Thank you very very much Garrett for the kind comment!

[@WilliamWatrous]

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

[@TheMarketExit]

The Algorithm works in mysterious ways. Thank you! 🍾

[@vagifrzayev280]

I would VC invest into your channel 🛩

[@nathansamuel222]

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]

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

[@ambig1]

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.

[@jasonfan54]

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]

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

[@benfowler1134]

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]

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! :)

[@benwillert480]

Never commented on a KZbin video before but the production quality here is just insane

[@davids7879]

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]

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]

@@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]

​@@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.

[@Wa7edmenalnass]

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

[@TheMarketExit]

Thank you Ahmed! Very kind of you

[@ChristophTempel]

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

[@cricketer1987]

Very interesting video - thanks! Private Equity clearly needs greater regulation and scrutiny. I've noticed a few companies in the UK where the products they sell have been degraded after being acquired by private equity firms. One example is PG Tips Tea which was owned by Unilever but then sold to a private equity firm which changed the shape and taste of the tea bags to a much poorer quality. You've also got Subway which was bought by a private equity firm last year and you already notice that the quality of Subway has also degraded. Private Equity is a really toxic industry and is making billionaires even richer at the expense of everyone else.

[@vink75]

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.

[@MinMin-mm1hd]

The level of presentation is outstanding and super easy to understand.

[@adfafdasdfasfa]

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!

[@erics2792]

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.

[@lawrencesmith9059]

The core problem with private equity is that once there is a downturn, there will be many bankruptcies and the managers of these PE firms will leave the pension funds holding a bag of you-know-what.

[@erics2792]

@@lawrencesmith9059​​⁠Well what we’re seeing now is that the funds are requesting extra time. A lot of partner agreements between the pension and the PE fund include a potential time extension (1-2) years. Contracts can be amended, and no firm wants to take a loss and have reputation risk, they need to keep raising funds etc. we’re at an interesting time right now.

[@KuzzatAltay]

Great video, learned a lot. Subscribed. Thanks!

[@TheMarketExit]

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!

[@sylascoker1483]

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

[@TheMarketExit]

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

[@beeman1408]

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.

[@halsokampen3600]

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]

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]

Were the owners forced to sell? I guess not.

[@halsokampen3600]

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

[@12345fowler]

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

[@vik914]

​@halsokampen3600 why would a business owner consider the impact on consumer choice? You offer him the present value of all his future cash flows today vs the grit of running the business over many years and uts an obvious choice. If the consumer/market feels strongly about it - and believe they could provide a better service than a PE bought gym then it seems a good opportunity to start a gym.

[@kentinspacetime5378]

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.

[@basstradamus1]

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!

[@WallaceRoseVincent]

I liked the sound effects. Thanks for the translation in English.

[@klaslundgren1817]

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

[@TheMarketExit]

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

[@alucky0]

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

[@TheMarketExit]

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

[@floaterof17]

capitalism without failure is like religion without hell

[@VAmissaAnima]

Nice analogy, but one philosopher statet that to exist, means to suffer…

[@hjf3022]

What is the analogy? Most of the world's religions do not have a Hell.

[@ritto6323]

​@@hjf3022Cap

[@lawrencesmith9059]

the problem with PE is that when the company fails, it does not hit the PE firm, which has extracted value from the company and leaves the losses for investors, employees and customers.

[@sabar2453]

How is that a good analogy. It's more like war crimes without accountability

[@nicola3240]

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]

Thank you, appreciate that :)

[@FutureBusinessTech]

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

[@TheMarketExit]

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

[@monaoconnell5650]

Thank you so much. Please keep the videos coming.

[@neilerickson3158]

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.

[@mazterz]

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]

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]

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]

@@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]

@@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]

@@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

[@timeismoney9450]

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

[@TheMarketExit]

Thank you my friend!

[@Lodeken]

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

[@RozzyF680-uf9qe]

Brilliant video I really enjoyed it. Thanks for the effort to create more awareness.

[@audioalt8]

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

[@TheMarketExit]

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

[@audioalt8]

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

[@Dealmaker84]

thank you for your clear explanations!

[@jsg0170]

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

[@TheMarketExit]

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

[@minhduc1997]

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

[@TheMarketExit]

Thank you very much!

[@ToblerX]

Only 623 subs? Wow, what a gem.

[@12345fowler]

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.

[@robdenker5805]

Simply outstanding explanation and production. PE is one of the dominant variables in the erosion of the middle class in industrialized countries creating serious, implications for inequity and social justice and of course, overall economic growth .

[@TheMarketExit]

Thanks!

[@hardstylelife5749]

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

[@omarmadian4264]

Production and Explanation are on Professional Level

[@misterinterrupt]

thanks for doing this channel, very informative!

[@benp9442]

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]

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

[@ruxuesim3043]

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]

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]

​@@TheMarketExithappy to hear this passion!

[@szymontauszynski1944]

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

[@TheMarketExit]

Thank you!

[@matthennessey6223]

Amazing video! Keep up the good work

[@franktfrisby]

Very nice work. Keep up the good work.

[@brandoncarpenter9681]

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

[@TheMarketExit]

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

[@Emdebe]

Great video. Really well done 👏🏼

[@ferminlizarraga4368]

Thanks for the video. Its great and really speaks out

[@TheMarketExit]

Glad you liked it!

[@erdinbeshimov]

Well done. Such an elegantly produced mini-documentary.

[@justmeajah]

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!!!!

[@MrCurcio99]

Great Job anyone considering selling there business to Private Equity needs to watch this !

[@ranterraver5959]

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

[@freddiekustaa2633]

Excellent video 👍🏽, great production 🙂👊🏽, includes the three ingredients that make a great video....this will hit more then I million views☝🏽.

[@TheMarketExit]

thank you very much Freddie! I hope you're right 😁

[@girlafraid4045]

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.

[@veryswede1576]

Hey hey , great videos .. I am in private equity and I totally agree with your analysis.. very good .. Tak..❤

[@TheMarketExit]

Glad to hear it - thank you!

[@__ag]

Absolutely amazing video, thanks!

[@langeboriskogen]

Important and interesting. Looking forward to the next video!

[@TheMarketExit]

thank you!

[@bogsieevans]

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

[@TheMarketExit]

Thanks Paulina!

[@JosueGarcia-ve6zc]

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

[@BaLthaZaR2105]

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

[@RichardL1]

Great content, thank you!

[@Madafaca6969]

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

[@TheMarketExit]

Thank you very much! Appreciated

[@davidhoang2527]

So good video. Needs these kind of videos which address swedish economics in English and professional approach like this . Kudo to you sir..

[@kingamplify8904]

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

[@TheMarketExit]

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

[@guillesrl7569]

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]

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]

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]

The editing is AMAZING

[@onlydivergences]

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

[@TheMarketExit]

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

[@supratikhajare8733]

Great explanation ! Thanks for the video.

[@TheMarketExit]

Glad you enjoyed it!

[@justnick6710]

This is quite well explained and easy to understand

[@tradefact7508]

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]

Thank you very much!

[@markthani9883]

Great video! Incredible quality!

[@TheMarketExit]

Thank you, I really appreciate your kind comment

[@ashh3051]

Nice sound design. Also enjoyed the insight into Private Equity.

[@TheMarketExit]

Thank you, I work a lot on the sound design, that really makes a difference. I'm struggling to get the sound mix right though, different to know what levels each sound should have.

[@yoladamoyi9801]

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

[@TheMarketExit]

thank you very much!

[@razellgaming4644]

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]

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

[@user-tg2jc7lk8n]

This is an extremely polished video. Well done

[@TheMarketExit]

Thank you!

[@AlexanderLandolsi]

Loved this! Thank you Andres

[@TheMarketExit]

🙏 thank you my friend

[@richpellegrin7713]

Fantastic video. Thank you for this wealth of information.

[@CeezaStudios]

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

[@TheMarketExit]

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

[@Noobfantasy]

Thank you for this informative video brother

[@jamesdean1143]

I admire you for giving up your highly paid (but very stressful) job and following your conscience and your humanity.

[@danmathew4427]

The quality of the content is absolutely great. New subscriber here.

[@TheMarketExit]

Welcome aboard! Thank you!

[@ronnywilliams3302]

I learned A LOT. Thank you man

[@TheMarketExit]

That's great! :)

[@victormutta1115]

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

[@TheMarketExit]

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

[@user-wr4yl7tx3w]

Very informative. Great content