Based on the feedback provided, a critique of private equity management and methods reveals several concerning trends:
These practices, where the ends justify the means, can lead to the destruction of previously stable businesses, loss of jobs, and negative impacts on local economies. The track record suggests that while private equity can generate significant returns for investors, it often does so at the expense of other stakeholders and the long-term health of acquired companies.
I work for an engineering company that was bought out by a private equity firm a couple of years ago. Since their purchase, we have had several rounds of layoffs, budget cuts, and members on the board suggesting we commit fraud by charging clients for work we haven't done to meet our numbers. Going from a company that was focused on engineering excellence to a stripped-down, shell of a company where shareholder profits is the primary driver has been very disheartening.
I worked at Michaels during their buyout from Apollo. To say the culture changed would be an understatement. When I first worked there we had 8 registers in the store, plenty of staff, and district managers were rarely on our ass about minutiae because they'd get taken care of before they needed to be a problem. Afterwards, we had two cash registers, only one cashier at a time, and 4 self checkouts. There was a credit card system all of a sudden that seemed deeply unpopular with customers, hardly any staff in the stores, cut hours left and right, and every manager up and down the chain seemed to be pissy at absolutely everything every single day. It became a miserable place to work, I was extremely suicidal by the end of my time there and leaving was the best thing I've ever done.
Private equity is a mistake. It's a crime.
I grew up watching my dad work. He brought me from tending wells all the way to the C level meetings. He did well, lead massive deals in shale, but refused private equity. He saw early private equity destroys companies early in his career, easy money but gave up control. Private equity looked to hit home runs, not do the fundamentals correct. They wanted explosive growth with unsustainable models. He always stressed doing the right thing, don't try to hit home runs, pick small consistent wins. Play by the rules (legality), know your strengths and stick to them. Private equity is growth at all costs.
Private equity sounds like a mechanism that extracts the most amount of value from a business, and transfers that wealth to the few general partners. Everyone loses - the business, the employees, the local consumers, the tax payers.... except for the general partners.