Download or read book Private Equity s Effects on Workers and Firms written by United States House of Representatives and published by . This book was released on 2019-11-28 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: Private equity's effects on workers and firms: hearing before the Committee on Financial Services, U.S. House of Representatives, One Hundred Tenth Congress, first session, May 16, 2007.

Download or read book Private Equity s Effects on Workers and Firms written by United States. Congress. House. Committee on Financial Services and published by . This book was released on 2007 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Private Equity at Work written by Eileen Appelbaum and published by Russell Sage Foundation. This book was released on 2014-03-31 with total page 396 pages. Available in PDF, EPUB and Kindle. Book excerpt: Private equity firms have long been at the center of public debates on the impact of the financial sector on Main Street companies. Are these firms financial innovators that save failing businesses or financial predators that bankrupt otherwise healthy companies and destroy jobs? The first comprehensive examination of this topic, Private Equity at Work provides a detailed yet accessible guide to this controversial business model. Economist Eileen Appelbaum and Professor Rosemary Batt carefully evaluate the evidence—including original case studies and interviews, legal documents, bankruptcy proceedings, media coverage, and existing academic scholarship—to demonstrate the effects of private equity on American businesses and workers. They document that while private equity firms have had positive effects on the operations and growth of small and mid-sized companies and in turning around failing companies, the interventions of private equity more often than not lead to significant negative consequences for many businesses and workers. Prior research on private equity has focused almost exclusively on the financial performance of private equity funds and the returns to their investors. Private Equity at Work provides a new roadmap to the largely hidden internal operations of these firms, showing how their business strategies disproportionately benefit the partners in private equity firms at the expense of other stakeholders and taxpayers. In the 1980s, leveraged buyouts by private equity firms saw high returns and were widely considered the solution to corporate wastefulness and mismanagement. And since 2000, nearly 11,500 companies—representing almost 8 million employees—have been purchased by private equity firms. As their role in the economy has increased, they have come under fire from labor unions and community advocates who argue that the proliferation of leveraged buyouts destroys jobs, causes wages to stagnate, saddles otherwise healthy companies with debt, and leads to subsidies from taxpayers. Appelbaum and Batt show that private equity firms’ financial strategies are designed to extract maximum value from the companies they buy and sell, often to the detriment of those companies and their employees and suppliers. Their risky decisions include buying companies and extracting dividends by loading them with high levels of debt and selling assets. These actions often lead to financial distress and a disproportionate focus on cost-cutting, outsourcing, and wage and benefit losses for workers, especially if they are unionized. Because the law views private equity firms as investors rather than employers, private equity owners are not held accountable for their actions in ways that public corporations are. And their actions are not transparent because private equity owned companies are not regulated by the Securities and Exchange Commission. Thus, any debts or costs of bankruptcy incurred fall on businesses owned by private equity and their workers, not the private equity firms that govern them. For employees this often means loss of jobs, health and pension benefits, and retirement income. Appelbaum and Batt conclude with a set of policy recommendations intended to curb the negative effects of private equity while preserving its constructive role in the economy. These include policies to improve transparency and accountability, as well as changes that would reduce the excessive use of financial engineering strategies by firms. A groundbreaking analysis of a hotly contested business model, Private Equity at Work provides an unprecedented analysis of the little-understood inner workings of private equity and of the effects of leveraged buyouts on American companies and workers. This important new work will be a valuable resource for scholars, policymakers, and the informed public alike.

Download or read book Private Equity s Effects on Workers and Firms written by United States. Congress. House. Committee on Financial Services and published by . This book was released on 2007 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Private Equity s Effects on Workers and Firms Serial No 110 31 May 16 2007 110 1 Hearing written by and published by . This book was released on 2007* with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Impact of Private Equity Investments on Portfolio Companies written by Stefan Albust and published by GRIN Verlag. This book was released on 2019-05-28 with total page 75 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2019 in the subject Business economics - Investment and Finance, grade: 1,2, Durham University, language: English, abstract: This dissertation takes up the private equity topic and analyzes its impact on the employees of the portfolio companies. As there has been no detailed research done so far on the German market, this paper focuses on the impact on German companies which were taken over by a private equity house. It is assumed that the investment of a private equity company leads to an increase in the number of employees (H1) as well as their average wages (H2). These hypotheses are based on the performed literature review which shows a rather diverse picture with a slight trend towards the advantages of private equity investments. The private equity industry is growing and therefore its importance is increasing as well. However, the reputation of private equity investors is not always positive and some harmful examples confirm this picture in the broader market. The negative history subsequently led to an increasing regulatory environment. Nevertheless, private equity financing has also many advantages for the portfolio companies such as the solution of succession concerns, additional equity financing and added external know-how. By analyzing five private equity owned companies from different industries in Germany and benchmarking them against their local main competitor as well as testing the results against their statistical significance, interesting results appear. On the one hand, H1 needs to be rejected as in 60% of the analyzed companies the number of staff decreased after the investment of a private equity company. On the other hand, H2 can be confirmed as the average wages of the remaining employees increased in 80% of the observed companies and also evolved better compared to their non-private equity backed peers. Additionally, this dissertation shows that the second year after the takeover (T+2) is rater special and requires further investigation. Due to limitations of this research paper, it is recommended to use all the identified results for a more detailed analysis on the reasons of the observations.

Download or read book From Wall Street to Work Floor written by Martin Olsson and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Private equity buyouts have sparked debates among labor unions and worker representatives on how they affect workers. This chapter provides an overview of academic evidence on how private equity buyouts affect workers. We review the theoretical reasons why employees could be affected and then survey the empirical evidence. We point out that significant strides have been made in understanding how private equity buyouts influence workers, with a plethora of studies available for policymakers and practitioners. These studies have found that the impact on workers is not uniform; it varies based on the type of buyout, the nature of workers' roles in the firm before the buyout, and the country's institutional environment. We also highlight a few understudied areas that warrant more attention.

Download or read book Private Equity Demystified written by John Gilligan and published by Oxford University Press. This book was released on 2020-11-04 with total page 434 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book deals with risk capital provided for established firms outside the stock market, private equity, which has grown rapidly over the last three decades, yet is largely poorly understood. Although it has often been criticized in the public mind as being short termist and having adverse consequences for employment, in reality this is far from the case. Here, John Gilligan and Mike Wright dispel some of the biggest myths and misconceptions about private equity. The book provides a unique and authoritative source from a leading practitioner and academic for practitioners, policymakers, and researchers that explains in detail what private equity involves and reviews systematic evidence of what the impact of private equity has been. Written in a highly accessible style, the book takes the reader through what private equity means, the different actors involved, and issues concerning sourcing, checking out, valuing, and structuring deals. The various themes from the systematic academic evidence are highlighted in numerous summary vignettes placed alongside the text that discuss the practical aspects. The main part of the work concludes with an up-to-date discussion by the authors, informed commentators on the key issues in the lively debate about private equity. The book further contains summary tables of the academic research carried out over the past three decades across the private equity landscape including: the returns to investors, economic performance, impact on R&D and employees, and the longevity and life-cycle of private equity backed deals.

Download or read book Shared Capitalism at Work written by Douglas L. Kruse and published by University of Chicago Press. This book was released on 2010-06-15 with total page 433 pages. Available in PDF, EPUB and Kindle. Book excerpt: The historical relationship between capital and labor has evolved in the past few decades. One particularly noteworthy development is the rise of shared capitalism, a system in which workers have become partial owners of their firms and thus, in effect, both employees and stockholders. Profit sharing arrangements and gain-sharing bonuses, which tie compensation directly to a firm’s performance, also reflect this new attitude toward labor. Shared Capitalism at Work analyzes the effects of this trend on workers and firms. The contributors focus on four main areas: the fraction of firms that participate in shared capitalism programs in the United States and abroad, the factors that enable these firms to overcome classic free rider and risk problems, the effect of shared capitalism on firm performance, and the impact of shared capitalism on worker well-being. This volume provides essential studies for understanding the increasingly important role of shared capitalism in the modern workplace.

Download or read book The Buyout of America written by Josh Kosman and published by Penguin. This book was released on 2009-11-12 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt: An authoritative exposé of the mysterious and potentially dangerous world of private equity Few people realize that the top private equity firms, such as Blackstone Group, Carlyle Group, and Kohlberg Kravis Roberts, have become the nation’s largest employers through the businesses they own. Using leveraged buyouts that load their acquired companies with loans, private equity firms have generated more than $1 trillion in new debt—which will come due just when these businesses are least likely to be able to pay it off. Journalist Josh Kosman explores private equity’s explosive growth and shows how its barons wring profits at the expense of the long-term health of their companies. He argues that excessive debt and mismanagement will likely trigger another economic meltdown within the next five years, wiping out up to two million jobs. He also explores the links between the private equity elite and Washington power players, who have helped them escape government scrutiny. The result is a timely book with an important warning for us all.

Download or read book Private Equity and Workers Career Paths written by Ashwini K. Agrawal and published by . This book was released on 2018 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze a new dataset on workers' career paths to examine whether private equity (PE) investments can have positive spillover effects on workers. We study leveraged buyouts in the context of recent information technology (IT) diffusion, and find evidence supporting the argument that many employees of companies acquired by PE investors gain transferable, IT-complementary human capital. Our estimates indicate that these workers experience increases in both long-run employability and wages relative to what they would have realized in the absence of PE investment. The findings underscore PE's role in mitigating the effects of workforce skill obsolescence due to technological change.

Download or read book Private Equity Demystified written by John Gilligan and published by Oxford University Press. This book was released on 2020-11-04 with total page 400 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book deals with risk capital provided for established firms outside the stock market, private equity, which has grown rapidly over the last three decades, yet is largely poorly understood. Although it has often been criticized in the public mind as being short termist and having adverse consequences for employment, in reality this is far from the case. Here, John Gilligan and Mike Wright dispel some of the biggest myths and misconceptions about private equity. The book provides a unique and authoritative source from a leading practitioner and academic for practitioners, policymakers, and researchers that explains in detail what private equity involves and reviews systematic evidence of what the impact of private equity has been. Written in a highly accessible style, the book takes the reader through what private equity means, the different actors involved, and issues concerning sourcing, checking out, valuing, and structuring deals. The various themes from the systematic academic evidence are highlighted in numerous summary vignettes placed alongside the text that discuss the practical aspects. The main part of the work concludes with an up-to-date discussion by the authors, informed commentators on the key issues in the lively debate about private equity. The book further contains summary tables of the academic research carried out over the past three decades across the private equity landscape including: the returns to investors, economic performance, impact on R&D and employees, and the longevity and life-cycle of private equity backed deals.

Download or read book Private Equity and the Demise of the Local written by Maryann Feldman and published by Cambridge University Press. This book was released on 2024-05-23 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt: Capitalism is a powerful engine that requires finance. Private equity is part of the neoliberal transformation of capitalism that has failed the average citizen and unleashed a tsunami of leveraged acquisitions that have destroyed entire sectors of our economy. Private equity has become a powerful force that has moved from restructuring industrial firms to buying up just about any economic activity in local communities that has assets that can be monetized, without any consideration of the impact on the quality of life and well-being of the community. Th a process has been aided and abetted by government policy. The authors of this Element explain the workings of the private equity model and the reasons it has been so profitable. They document the effects of PE on firms and communities by examining a range of activities that once had a local focus. They conclude by offering policy recommendations.

Download or read book The Private Equity Edge How Private Equity Players and the World s Top Companies Build Value and Wealth written by Arthur B. Laffer and published by McGraw Hill Professional. This book was released on 2008-07-01 with total page 449 pages. Available in PDF, EPUB and Kindle. Book excerpt: The world is changing and has never been more challenging to private equity players, public companies, and investors. With record market volatility and a global economic crisis, decision makers of all types can learn from successful private equity players and other top value builders. Private equity is growing at a rapid rate, with $2.7 trillion in transactions since 2001 and buyouts occurring in every type of market, including declining ones. And now, with the end of investment banks as we know them, the door is open to more opportunities than ever. In The Private Equity Edge, economics giant Arthur B. Laffer, along with value-building experts William J. Hass and Shepherd G. Pryor IV, combines the concepts of intrinsic value, macroeconomics, and incentives into a single strategy used by today’s top value builders. You’ll learn how to create value while reducing risk by: Thoroughly exploring relevant data to quantify ranges of value and risk Anticipating reactions of those whom you seek to influence Exploring possibilities and options before making major decisions Employing incentive systems that work in both up and down markets Examples of major private equity players at Blackstone, KKR, Carlyle, Cerberus, and Madison Dearborne Partners illustrate what to do and what to avoid in specific situations. Decision makers seeking to take full advantage of the new, interconnected world of business and economics will learn how to make the best decision the first time around, quickly and with conviction—the key to seizing the private equity edge.

Download or read book Your Former Employees Matter written by Linus Siming and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that former investment bankers become important clients for their previous employers and also provide access to profitable business opportunities to their new private equity employers through their previous employment networks. I observe 1,326 individuals directly involved in 1,285 transactions, of whom a large majority have changed their occupation from financial advisor to private equity professional. The social networks arising from these labor market movements affect private equity firms' choices of financial advisors, as well as the sourcing, pricing, and performance of deals.

Download or read book Private Equity and Its Impact written by Spencer J. Fritz and published by . This book was released on 2009 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book looks at the increase in leveraged buyouts (LBO) of U.S. companies by private equity funds prior to the slowdown in mid-2007 which has raised questions about the potential impact of these deals. Some praise LBOs for creating new governance structures for companies and providing longer term investment opportunities for investors. Others criticise LBOs for causing job losses and burdening companies with too much debt. This book addresses the effect of recent private equity LBOs on acquired companies and employment, the impact of LBOs jointly undertaken by two or more private equity funds on competition, the Securities and Exchange Commission's (SEC) oversight of private equity funds and their advisers, and regulatory oversight of commercial and investment banks that have financed recent LBOs. The U.S. Government Accountability Office (GAO) reviewed academic research, analysed recent LBO data, conducted case studies, reviewed regulators' policy documents and examinations, and interviewed regulatory and industry officials, and academics. The GAO recommends that the federal financial regulators give increased attention to ensuring that their oversight of leveraged lending at their regulated institutions takes into consideration systemic risk implications raised by changes in the broader financial markets.

Download or read book Private Equity Jobs and Productivity written by Steven J. Davis and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Private equity critics claim that leveraged buyouts bring huge job losses and few gains in operating performance. To evaluate these claims, we construct and analyze a new dataset that covers U.S. buyouts from 1980 to 2005. We track 3,200 target firms and their 150,000 establishments before and after acquisition, comparing them to controls defined by industry, size, age, and prior growth. Relative to controls, employment at target establishments falls 3 percent over two years post buyout and 6 percent over five years. However, target firms also create more new jobs at new establishments, and they acquire and divest establishments more rapidly. Considering all adjustment margins, relative net job loss at target firms is a modest one percent of employment over two years post buyout. In contrast, the sum of gross job creation and destruction at target firms exceeds that of controls by 14 percent of employment over two years. Buyouts also bring TFP gains at target firms and reductions in earnings per worker. Productivity gains arise mainly from an accelerated exit of less productive establishments and greater entry of more productive ones - that is, from a directed reallocation of jobs within target firms.