Dan Rasmussen

[spartan]

These articles are a gold mine: https://verdadcap.com/featured-thinking

 

Data-driven arguments, eloquent prose, and written by someone with actual experience (Harvard, Bain Capital, then started his own fund).

 

What an excellent way to spend the morning. Highly recommend.

 

Here is an excerpt from his PE article:

 

"The California gold rush of 1849 was led by individual speculators who dreamed of newfound wealth. The great private equity gold rush of the postcrisis era, like the subprime bubble before it, is led by managers and consultants, whose spreadsheets are well formatted and precisely wrong.

 

The California gold rush of 1849 was based on the discovery of actual gold in streams and mountains. The great private equity gold rush of the postcrisis era is based on airy ideas about operational improvements, low volatility, and historical outperformance. They may not be tangible, but they make for good bullets in a PowerPoint presentation.

 

The California gold rush of 1849 did not end well for the poor and desperate speculators who dreamed of a better future. And the great private equity gold rush of the postcrisis era may not end well for the confident experts who deploy other people’s capital with the goal of staying rich, not getting rich—and it may be even worse for everyone else.

 

How much has private equity contributed to the bizarre economic situation of recent years—in which asset prices soar while underlying GDP, along with productivity growth, remains historically weak? And is today’s private equity froth a warning sign of the next crisis?"

[Gregmal]

Yea private equity is the ultimate play on free/cheap money. It may end badly for them, but it will undoubtedly be worse for all others involved. These guys are wizards when it comes to extracting value for themselves then pass the hot potato. Often leaving businesses doomed for bankruptcy, the employees then unemployed, and the retail investors who bought the IPO two years ago wiped out... just how it works