Private Equity Wants in on the Bailout? Spare Me
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Private Equity Wants in on the Bailout? Spare Me
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Re: Private Equity Wants in on the Bailout? Spare Me
#2If the real goal here is to save jobs, this is all completely irrelevant.
Re: Private Equity Wants in on the Bailout? Spare Me
#3If the real goal here is to save jobs, this is all completely irrelevant.
It is possible to save as many jobs with "more expensive money" when in comes to Private Equity firms - and that would be a better investment for the taxpayers
Re: Private Equity Wants in on the Bailout? Spare Me
#4>But do they really deserve any part in a bailout?
Do any of these companies?
The whole concept of bailouts create bad incentives - to me that's more the crux of the issue. But if you're gonna do them anyway then I see little justification for including/excl some just because they're listed vs private.
Plus it makes way more sense to "save" the economy at grass roots level anyway. I'd prefer more of a suddenly expanded social safety net type situation. Similar to what the US is doing with corona checks and what Germany is doing with blanket guarantees tp try and prevent layoffs.
Re: Private Equity Wants in on the Bailout? Spare Me
#5It's not about bailing out the investments, but about preserving jobs. Fine, attach restrictions for taking bailout capital, but that should be the purpose.
Re: Private Equity Wants in on the Bailout? Spare Me
#6It's not about bailing out the investments, but about preserving jobs. Fine, attach restrictions for taking bailout capital, but that should be the purpose.
You can get different types of "bail out" for different types of companies... It can be "much more expensive" for private equity firm than "normal" SME... You save as many jobs and you save a lot of taxpayers money
Re: Private Equity Wants in on the Bailout? Spare Me
#7It's not about bailing out the investments, but about preserving jobs. Fine, attach restrictions for taking bailout capital, but that should be the purpose.
You can get different types of "bail out" for different types of companies... It can be "much more expensive" for private equity firm than "normal" SME... You save as many jobs and you save a lot of taxpayers money
My point is no need to target preservation of equity value but instead ensure those facing job loss are supported. However, the current legislation doesn't allow portfolio companies to take bailout capital as a result of restrictions based on portfolio companies being "affiliates" of one another. Similar issues are faced by VC portfolio companies.
Re: Private Equity Wants in on the Bailout? Spare Me
#8If a company can issue stocks or bonds and needs to raise money, it should issue stocks/bonds instead of getting bailed out by the government. If no one's buying, talk to the Fed.
Re: Private Equity Wants in on the Bailout? Spare Me
#9Earlier quoted context omitted.
You can get different types of "bail out" for different types of companies... It can be "much more expensive" for private equity firm than "normal" SME... You save as many jobs and you save a lot of taxpayers money
My point is no need to target preservation of equity value but instead ensure those facing job loss are supported. However, the current legislation doesn't allow portfolio companies to take bailout capital as a result of restrictions based on portfolio companies being "affiliates" of one another. Similar issues are faced by VC portfolio companies.
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Re: Private Equity Wants in on the Bailout? Spare Me
#10If a company can issue stocks or bonds and needs to raise money, it should issue stocks/bonds instead of getting bailed out by the government. If no one's buying, talk to the Fed.
The problem is they were already operating on razor thin margins. Imagine people walking through their lives with only $10 of savings, and hundreds of thousands of dollars in debt. First time something happens, boom, you go bankrupt.
Same with PE companies. They leverage up to the highest possible values, and then a bit more. They knew the risks of doing so, but the risks were worth it because they would make so much money if they paid off. But they didn't paid off. Why should we bail them out?
In fact, is there something we can do to PREVENT these colossal leverage figures? Banks don't care, regulators can't do much about it, PE companies don't care, the companies being bought out don't have a say, and neither consumers.