Earlier quoted context omitted.
Do you think losing the equity portion of the investment means no risk? It's not fully debt financed. And that debt financing bears an interest proportional to the riskiness of the asset's cashflows. There are lots to hate about LBOs but they aren't entirely devoid of value
The risks are asymmetric in real world terms. For the PE side, the worst-case outcome is bankruptcy of the company they bought via LBO, but because it was an LBO their own exposure is relatively minimal (the lender is the one with the one most capital at risk). At the end of the day, it's a balance sheet item, a cost of doing business, a few digits on a spreadsheet. But for the company that was bought? Those are peop…
We have spent the last 50-ish years "legitimizing" things like PE buying up essential services and implementing cost cuts. When I say "legitimizing", I mean we keep removing the avenues for the "regular people" to legally and formally reduce the harms that this sort of business brings about. It becomes just a fact of life: people can come in and do this and you have to "deal with it".
When you have people dying, watching their streets crumble, have garbage piling up, etc., you can't just think that "regular people" (or maybe "the little people", as some businesspeople might view them) will "deal with it" forever, regardless of how much legal, financial, and political cover you provide yourself. At some point, there will be a reckoning. In that case, you'll prefer that it be through a regulation change, lawsuit, or lost election/ballot initiative.