Mapping the world's opinions

argument top image

Is private equity good for the economy? Show more Show less

Private equity firms have been called "locusts" by the German chancellor Angela Merkel but proponents argue that private equity investors make companies more efficient, create economic growth and provide good economic returns to investors.

Private equity leads to higher default rates and more bankruptcies and worse outcomes for customers and workers Show more Show less

Private equity is a misnomer and should properly be called leveraged buyouts. Leveraged buyouts, by definition, increase borrowing and raise the probability of bankruptcy.
(3 of 3 Positions)

Most claims of growth by private equity are false

Studies have shown that private equity leads to higher defaults, its claims to increase productivity are a sham, and it causes higher rates of job losses and firings in target companies as well as lower wages. (Unsurprisingly, industry-funded studies are much more sanguine.) But perhaps the most damning indictment of the private equity model is that their returns are overstated and their performance simply not as good as they lead investors to believe.
< Previous (5 of 5 Arguments)

Context

The Argument

Counter arguments

Framing

Premises

Rejecting the premises

Proponents

Further Reading

References

    Explore related arguments

    This page was last edited on Monday, 20 Apr 2020 at 07:29 UTC