Some Private Equity Firms Doomed To Fail as High-Flying Industry Loses Its Way (bloomberg.com)
- Reference: 0179518712
- News link: https://news.slashdot.org/story/25/09/24/162214/some-private-equity-firms-doomed-to-fail-as-high-flying-industry-loses-its-way
- Source link: https://www.bloomberg.com/news/articles/2025-09-16/private-equity-pours-billions-into-troubled-firms-that-fail-s-p
The industry holds $1.2 trillion in dry powder and nearly a quarter of that capital was pledged at least four years ago. More than 18,000 private capital funds seek $3.3 trillion from increasingly reluctant investors, Bain estimates. Quarterly returns for US private equity funds fell from 13.5% in Q2 2021 to 0.8% in Q4 2024. Apollo President Jim Zelter described the situation as a "natural washout" at an investor conference this month. Charles Wilson of Selby Jennings added that "many PE firms are dead already, they just don't know it" and noted survival depends on how forgiving limited partners -- the entities, including pension funds and endowments, that have invested in private equity firms -- prove when firms return for new fundraising.
[1] https://www.bloomberg.com/news/features/2025-09-22/private-equity-firms-fundraising-stumbles-after-high-flying-era
They've eaten up all the good companies (Score:5, Insightful)
What's left are the dregs that turn into scams.
This is incidentally why they opened up private equity to regular investors. Your 401k is about to have hundreds of millions if not billions of dollars poured into it from dodgy private equity stocks.
They're aren't enough public pensions for them to dump bad investments on anymore because again they've killed them all already.
So now they're coming for your 401k. Better start picking out your favorite flavor of cat food. And make sure you have a dry option for backup. But hey you sure showed those bureaucrats what's what right?
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Get your own sig instead of impersonating others.
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Bitcoin is working well right now. Tulips worked well for a while. Pets.com had a Super Bowl ad. US housing -- remember the folks who said you can never lose money investing there? I can't prove Bitcoin will crash, but I think its only value is that people think it has value; if others decide they don't want your Bitcoin, you can't eat it or wear it or make anything useful with it.
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The tulip argument worked against bitcoin for a few years. Tulip mania lasted 4 years, bitcoin has been growing in vast percentage gains in most years for over a decade. It's pretty solidified as a mainstay of wall st, multiple countries federal caches, and a backbone of lots of legitimate international trade.
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So it's up to you to not choose that investment from the list. I certainly won't.
What goes around.... (Score:3)
"Some Private Equity Firms Doomed "
Good. That's akin to "cockroaches get squished."
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Squiiiiiiiiiiiiiiiiiiiiiiiish
Good (Score:3)
Private equity firms are a scourge on society (like Zillow outbidding home buyers just so they can rent it back to them at twice what their mortgage would've been).
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Zillow is actually worse. What they were doing was buying up properties to artificially inflate the value of the properties surrounding it that they owned.
It's the kind of market manipulation that used to be illegal and probably still is if we enforce the laws.
But Americans can't walk and chew gum at the same time. So while we are busy freaking out over whatever moral panic they put in front of us this week, currently trans kids in sports, we can't also demand law enforcement do anything about this cr
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Well, I don't know if I'd call them a scourge, but I do have a hard time seeing how they provide a net benefit.
So, the collapse comes sooner? (Score:3)
Given the stories that are finally calling AI a bubble, and one ending, that will probably trigger this collapse.
And you thought 1929 was bad...
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Right on schedule.
[1]https://www.progress.org/artic... [progress.org]
That article is from 2012.
[1] https://www.progress.org/articles/the-depression-of-2026
dining (Score:1)
Private Equity ruined all chain restaurants. Cuts in pay and everything else, company strapped with debt, menu prices skyrocket, quality declines. I heard on the radio recently that Olive Garden is going to offer smaller portions at reduced prices, because 43% of adults order off the kids menu. Guess who owns Olive Garden and its typical take-over story?
Every single Darden brand has the same run-down, over-priced, and indebted, story. Only the PE dicks make money, everyone else suffers.
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Anyone can mismanage a company. PE intentionally manages all profits to the top while trying to minimize services. The PE got paid by debt already when the company fails, they don't really care.
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> The equity holders get paid back when the company is sold or IPOs.
Not if the business can earn it out. Its a risk PE is willing to take because they've offloaded liability.
private equity (Score:2)
The problem is the product isnt the business or whats it sells the product is profit. You can only milk so much out of a turnip.. Companies bought not to make a profit but to fail so they can offset what in their portfolio is making a profit. Perfectly good/profitable company's going bankrupt to a meet a tax write off need.
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The first sentence is correct. The rest is not. Let's get rid of this myth that rich people prefer to lose money than to pay tax. No one has ever refused to make more money, even if that money gets taxed (at least no one that understands taxes and basic finance).
You're right though that PE firms are leeches. They're firms by rich people for rich people, that milk the shit out of anything they touch. The reason why there's an issue now is clearly stated in the summary (for once!): "attractive takeover targ
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They load the companies up with debt. This converts taxable profits into loan interest payments that are deductible against tax. The loan interest is generally received in a jurisdiction where it isn't taxed. So it is a way of shifting profits offshore.
Celebrating? (Score:2)
"how forgiving limited partners -- the entities, including pension funds and endowments, that have invested in private equity firms -- prove when firms return for new fundraising" have a pension? mmm who has endowment funds?
"dry powder" = unallocated capital (Score:2)
"For venture capital (VC) and private equity (PE) firms, dry powder refers to the amount of committed, but unallocated capital a firm has on hand. In other words, it’s an unspent cash reserve that’s waiting to be invested."
[1]https://pitchbook.com/blog/what-is-dry-powder [pitchbook.com]
[1] https://pitchbook.com/blog/what-is-dry-powder
Gee... (Score:2)
The Vampire is dying. What a shame. /s
Good riddance (Score:2)
You wanted to create "dark markets" to hide your trading and ownership from public view? This is what you deserve. Investors need to be wary of putting their money into markets where the products and pricing can't be examined by many eyes.
> survival depends on how forgiving limited partners -- the entities, including pension funds and endowments, that have invested in private equity firms -- prove when firms return for new fundraising.
Blackmail. "Pay us some more or your existing positions evaporate." Also blackmail in that if the situation doesn't change (to bail out PE funds), pension funds and endowments will lose their investments. Public employees pensions, universities, etc. What will happen to a
Awwww (Score:1)
Wont somebody think of the parasitic millionaires?
here that? (Score:2)
thats the smalliest violin ever.
Content creators as well (YouTube, etc) (Score:2)
Practically speaking all the large YouTube channels have been taken over by private equity. Some we know about because the channel is honest enough to tell us (e.g., Veritassium, yes, Ve is owned by private equity).
Others you may have seen by the rise in "Why I'm quitting X" (where X is some big channel - think the likes of Donut, Linus Tech Tips, and such) where some big talent on the screen leaves the network or channel. You don't see this so much these days as PE contracts often state the main talent mus
Good fucking riddance (Score:4, Insightful)
It's a bit harder to get others to buy your companies once you've run them into the ground.
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Rats, no mod points, but you are correct.