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Jun 27

NY Times: Private Equity-Owned Companies Liquidate Less

In the court of public opinion, private equity firms are painted as hack n’ slashers who are likely to pull the plug on companies when the going gets tough.

Hold the phone: that’s not true, according to a Moody’s report (reported by the New York Times) that studied one thousand struggling companies since 1988. In fact, private equity owned businesses that fell on hard times were half as likely to liquidate as their non-private-equity-owned counterparts.

What does that mean? If a company is liquidated, you will lose your job. If a company is not, you might keep your job.

The moral of the story:┬ádon’t jump to conclusions. It’s okay to dislike private equity, but do it for the right reasons — wealth aggregation, large paydays for execs and investors, putting too much financial burden on healthy businesses. Don’t do it for false facts promulgated by media.