Smart. Sharp. Funny. Fearless.
Thursday, October 27, 2016

The Dirty Little Secret Of Private Equity Profits

The Dirty Little Secret Of Private Equity Profits

Today, for the first time, I am officially notifying the honchos of Bain Capital, Blackstone Group, Carlyle Group, Kohlberg Kravis Roberts and other big-time private equity funds that I am available. My little company, Saddle Burr Productions, can be had. For a price.

I publish this notice in response to a recent news item revealing that these firms have a unique and perplexing problem: They have too much money on hand. In all, they’re holding a cool trillion dollars that super-rich speculators, banks and others have entrusted to them. Private equity funds are corporate predators that borrow huge sums from these richies, using the cash to buy out targeted corporations, dismantle them and sell off the parts to make a fat profit for the investors and themselves.

However, in these iffy economic times, these flush funds have hesitated to do big takeovers, so they’ve just been sitting on all that money (which the predators refer to as “dry powder”). The problem is that under the rules of this high-stakes casino game, the firms have to spend their borrowed money by a set time — or give it back. And the clock is ticking.

So, using Wall Street’s macho lingo, the big players have announced that they’re now ready to go “elephant hunting” and are prepared to fire big bucks to bag some companies. To which I say: Fire away at Saddle Burr Productions!

OK, my company is hardly an elephant. But maybe it could be what the equity hucksters refer to as a “hot potato.” That’s what they call it when one fund grabs a company just to sell it to another fund, which might pass it off to yet another.

This year, equity firms are expected to spend more than $22 billion this year selling hot potatoes to each other — in part, just to move cash out the door so they don’t have to give it back.

This is what passes for good business sense in the truly screwy world of private equity. It’s just churning money, producing absolutely nothing — except, of course, huge fees for the churners. But if that’s the game, hey, put me in the mix. A billion dollars sounds about right.

  • bcarreiro

    Is this how you want your company represented? Its one thing to be successful another to stay successful. An honest living has faded and now we are using the memo as a promoter for this is how the rich stay rich and the poor stay poor. Honestly “who cares” is what you are telling us little people who are the consumers who make the rich who they are. by all means get dirty.

  • nobsartist

    willard is hiding the fact that he moved American manufacturing companies to China and entered into a business relationship with the RED CHINESE ARMY. willard has stashed hundreds of millions in chinese banks that will not comply with the IRS requests for information. that is why willard is getting sensetive inteligence contracts from the chinese government.

    willard is a traitor. that is why he is hiding his tax returns.

    mccain saw it, thats why he picked an idiot like palin instead of the Cranbrook/Harvard educated willard.

  • William Deutschlander

    The truly sad fact is that these “Private Equity” “Capitalists?”, for the most part contribute nothing of value to the World Economy. In Actuality their goal is to REMOVE OPERATING CAPITAL from the WORLD ECONOMY and convert that OPERATING CAPITAL that actualy creates employment opportunity, into PERSONAL WEALTH that they place in PERSONAL ACCOUNTS, in countries that will protect their wealth from income and capital gain TAXES in the United States of America.

    Consider for a moment Bain Capital moving the Illinois company to China. The company is presntly profitable paying an average wage of $17.00 per hour and 170 employees. They will move the companies equipment to China and get a CREDIT FROM THE US GOVERNMENT for the cost of relocating the equipment. In China they will pay an average wage of $1.00.
    Assuming the same number of employees working a 40 hour week the labor saving amounts to more than $108,800.00 dollars per week, plus they will save on the cost of benefits and the cost of safety equipment. In 50 weeks they will pocket Five Million Dollars that they will not have to pay any U S taxes on.

    This is primarily a Republican based philosophy that has in fact severly impacted the U S Economy, U S Employment and the U S Debt. When the Republicans take our country into RECESSION it severly impacts individual families ability to survive and reduces the REVENUE (taxes) required to provide safety, health, education and the safety net that has been the source of envy of the rest of the world.

    • montanabill

      You are a man who knows no history of the U.S. and virtually nothing about business.

      • Are you talking to yourself because you sure did discribe who you are.

  • Lisztman

    Bravo. I’ve seen (and, to some extent, been victimized by) the takeover-milk-and-sell game at close hand. It might be pretty for the entrepreneur who gets his cash (good luck with SBP…ha?) but it usually means a factory closing or two. So much for “job creation”…

  • ObozoMustGo


    Let’s talk about the most important issue of the day: THE BENGHAZI COVER UP.

    Obozo was lying during the debate and the fat chick, Candy Crowley, covered for his lies. His speech in the rose garden said nothing about the planned and coordinated terror attack in Benghazi, but merely remarked about terror in general. He lied. It is now known that we had a predator drone over the consulate recording and beaming back the incident as it occurred to the White House situation room. They knew immediately, as it happened, that it was a planned, military-style, terror attack. How do we know he was not talking about Benghazi? Because for 4 weeks follwing 9/11 he and his useful idiot tools, like Rice, were going on TV and giving interviews and making speeches claiming the incident was from a spontaneous protest over a stupid movie trailer on YouTube. NEVER ONCE has Obozo ever admitted that the incident was a planned and coordinated radical Islamic terrorist attack. He lied and covered this up for a month. He is now doing the rope-a-dope by claiming an investigation must be done before they know what happened when they watched it.

    The question is why? I know why. Because the lie is less costly than that truth. What is the truth? Here it is.

    The Ambassador was a CIA operative working North Africa many for many years, definitely former, maybe current as well. He brokered the deals to get US weapons in the hands of the rebels (Al Qaeda and Muslim Brotherhood terrorists) to take over Kaddafi. The 2 ex-Navy SEALS were CIA operatives. They were in Benghazi without military protection because they were secretly trying to track down the weapons cache that we gave to the terrorists. How do we know the SEALS were CIA operatives? Because one of them was interviewed by ABC 1 week prior where he said that part of his mission in Libya is to find weapons stashes. He did not admit to being a CIA operative, but we do know this: Embassy guards and ambassadors DO NOT go looking for weapons stashes as a part of their duties. That’s also why the drone was flying above. It was helping to find the weapons.

    The reason Obozo is lying about this whole thing is that he does not want it to come out before the election that he has been supplying radical Islamic terrorist organizations like Al Qaeda with high tech US weapons. He is now doing the same exact thing in Syria. This should be the lead story on every newspaper and every TV news show, but they are in the tank for Obozo. Just like the fat chick Candy demonstrated very clearly during the debate.

    The truth will come out at some point. God willing, it will be before the election and Obozo will be revealed as the lying empty suit that he really is.

    Have a nice day!

    “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” – Joseph Goebbels