A Quote by Paul Krugman
Not all private equity people are evil. Only some.
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Private equity firms aren't necessarily evil by definition. There are many stories of successful turnarounds fueled by private equity, often involving multiple floundering businesses that are rolled into a single entity, eliminating duplicative overhead.
We really wake up every day trying to build businesses. That is the goal of private equity. It's a misnomer out there that private equity profits by shrinking companies. In fact, it's just the opposite. Private equity creates value by growing great companies.
Private equity has absolutely no reason to exist. The private equity holder has all the upside and the banks all the downside.
Being a good private equity investor is more complicated than it seems. I would say that there are a few characteristics that are important. If you look at the skill set that you need to ultimately be a successful private equity investor, at least at the senior level, you have to be, in this business, a good investor. You have to be able to help companies perform and you have to have judgment around exiting investments. If you look at the skill sets there, they include some things you can teach and some that you can't.
I have the belief that truly evil people, it's a genetic evil. I only have the experience of exploring the landscape of some of the characters I've played that people have labeled as evil; I don't think they're evil.
I've probably done more venture capital deals and expansion financings than I have done private equity deals. But both are the same. Private equity companies have also built jobs.
The private equity world is a relatively small one. There are currently probably a few thousand professional jobs worldwide. In private equity, that's probably about all there is. So in the scheme of things, the firms are all relatively small.
When I was a CEO, I thought I understood private equity. I didn't. And what I've learned since my retirement, and since becoming directly involved in the world of private equity, points the way to a new career path for thousands of talented senior executives - and a new engine for value creation.
Some of the very best private equity people, in my experience, are people who start out as stock pickers - people who really understood value, how to take a company's financials apart and couple that with good judgment about businesses, macro trends, and where things are going.
Nobody in my generation ever started out in private equity. We got there by accident. There was no private equity business - actually, the word didn't even exist - when I started. I got there out of the purest of happenstance and so I think many people find what they really enjoy doing just in that way. So another piece of advice for you is: don't worry too much about what you're going to be doing when you get out of business school - life will come your way.
People do evil things because they are evil. Some people are evil in the way that some things are coloured indigo. They commit their evil deeds not to achieve some goal, but just because of the sort of people they are.
Some people give themselves over to their most evil desires, and those people becomes evil. But in general, it's reductive to think of evil as something foreign and separate from the rest of us. Evil is part of everyone. We all have the capacity to commit evil acts.
A consolidation makes sense only if you can lower your overall interest rate. Many people consolidate by taking out a home equity line loan or home equity line of credit (HELOC), refinancing a mortgage, or taking out a personal loan. They then use this cheaper debt to pay off more expensive debt, most frequently credit card loans, but also auto loans, private student loans, or other debt.
We've got to move beyond the idea that the public and private sectors are at odds. Government has to lay the groundwork for private equity to productively invest in things like education. It's a partnership, not a battle.
Evil…doesn’t mean doing things that have bad consequences for people. It means private thoughts and actions that are not to “the Christian majority’s” private liking.
If you have money draining out of the public equity markets, that inevitably affects the private equity market. They cannot exist going in different directions because somehow that will rent the fabric of the universe. It's just not permitted that that happens. Obviously there can be anomalies for brief periods of time but it just can't happen forever.
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