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Private equity is buying everything from vet offices to tech conglomerates

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Re: Private equity is buying everything from vet offices to tech conglomerates

#341

Post by Nasrudith »

agentgumshoe wrote: post #297
briandoll wrote: post #79

A friend of mine is a Vet at a place recently sold to a PE firm. If your wait times are crazy long, if you can't get through on a phone, if you realize your vet's office has parted ways with the great vet you used to see -- that's the PE firm counting beans and destroying the service for customers in an effort to squeeze every dollar out of the system. As a specific obviously bad example -- Vet services in California…

The article talks to that and how business now advertise in caps "NOT PRIVATE EQUITY OWNED." Surely that's an easy antitrust win to point out, it's gotta be causing significant consumer harm to be labelled so boldly as a selling point!

Is "family owned" a sign of an easy anti-trust win? Because plenty of "cuddly" concepts basically irrelevant to the consumer are used in advertising.

Re: Private equity is buying everything from vet offices to tech conglomerates

#342

Post by tduan »

archon810 wrote: post #338
tduan wrote: post #337

Genuine question, why do most articles discussing PE seem to portray them in a malicious light? Fundamentally, PE investors have skin in the game - they do invest on behalf of their LP, but typically GPs contribute a portion of their own income into the fund as well, not to mention their compensation is tied to performance. The consequence of that gives them every incentive to help a company succeed, and not ruin it.…

Because Private Equity is associated with squeezing every penny from the purchased business and making user experience a secondary concern. For some examples, read some of the stories in other comments here and on the web.

Here's another perspective - I've seen PE firms do as you described, cut costs and fire employees, just as much as I've seen them inject more capital into a business and help them with further M&A. Having better user experience can lead to increased revenue (better product, improved branding - leading to increased market share for example) - which should equally be an incentive to PE firms as well.

None of the anecdotes you mention counteract the nature of the industry as whole: https://caia.org/blog/2022/07/20/long-term-private-equity-pe...

I've already caveated that bad investments may occur. My question is why the negatives are being focused versus the positives?

Re: Private equity is buying everything from vet offices to tech conglomerates

#343

Post by TylerE »

Hamuko wrote: post #331
agentgumshoe wrote: post #329

Earlier quoted context omitted.

And vets don't have to sit there day after day watching a husband or wife sit lovingly next to their partner who can't remember them, or worse hurls abuse at them, or can't speak, etc. Or a dying person that their family can't be bothered visiting, etc. They can both be immensely horrible and also immensely rewarding jobs, it's not a competition.

How high are elderly care nurses on the suicide statistics?

You keep using the word nurse. We're not talking about nurses, but the aides that do all the dirty work - bathing patients, changing diapers, etc.

Re: Private equity is buying everything from vet offices to tech conglomerates

#344

Post by lotsofpulp »

legitster wrote: post #104
Dwolb wrote: post #80

Earlier quoted context omitted.

Agreed. Had a family member receive an LOI at 10x EBITDA so they decided to sell (not sure where they closed). They mentioned that if a doctor would have purchased the practice, it would be 1x or 2x at best. Related: they would have been interested to scale up, but didn't know how and were afraid of the complexity of trying to manage a 3rd location.

Another thing to keep in mind is that it was a completely different regulatory environment when most of these private practices started. 50 years ago you could run a cash business with yourself, a receptionist, and a nurse. Incumbent practices could keep up with the times and add billing staff, but you would have to be insane to start a new practice today. I'm all for healthcare reforms, but it's a pity that we didn'…

The human body is an insanely complex system, hence the resulting complex system to discern fraud and waste. Really only a doctor or very educated person can evaluate another doctor’s determination.

Re: Private equity is buying everything from vet offices to tech conglomerates

#345

Post by tomaskafka »

vault_ wrote: post #111
legitster wrote: post #40

Despite the directions the interviewer tried steering this conversation into, this is a really interesting interview. But when it comes to the private equity roll-ups, I think everyone is missing the forest for the trees. If you are a doctor looking to retire and sell your business there is no one else right now who would buy it . The same goes for every category of "mom and pop" business in the US. Even if you could…

> A doctor knows what his practice is worth and wants every cent he can get out of it - but the next generation of doctor is not going to be able to compete with debt financing what a PE cash-buyer can get. In my opinion, the physician in this example is a monster. Profit maximization is a choice, not some kind of moral imperative. Am I supposed to have any respect for somebody selling out their employees and patient…

The system and incentives the US voters have set up says "we want you to sell to the vampires, and will give you a huge financial bonus if you do".

Maybe if voters didn't want such system, they might vote different people into power, or vote to change the system.

POSIWID. https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...

Re: Private equity is buying everything from vet offices to tech conglomerates

#346

Post by agentgumshoe »

Hamuko wrote: post #331
agentgumshoe wrote: post #329

Earlier quoted context omitted.

And vets don't have to sit there day after day watching a husband or wife sit lovingly next to their partner who can't remember them, or worse hurls abuse at them, or can't speak, etc. Or a dying person that their family can't be bothered visiting, etc. They can both be immensely horrible and also immensely rewarding jobs, it's not a competition.

How high are elderly care nurses on the suicide statistics?

Is it a competition?

Re: Private equity is buying everything from vet offices to tech conglomerates

#347

Post by coderenegade »

singleshot_ wrote: post #286
evancox100 wrote: post #234

Earlier quoted context omitted.

Dollar General didn’t move down market, they moved up. Still plenty of regular grocery stores around, at least here. And who abandons the middle part of the market? The providers? The customers? Not really making sense here but I get it if you’re just venting or whatever.

I didn't mean that dollar stores had moved down market; I meant that dollar stores moved in, split the low end of the market out of the old "regular grocery store" and now the medium grocery buyer is left with the choice of dollar store groceries or some kind of grocery delivery service/meal kit/personal chef. If this doesn't make sense, maybe it's a metaphor. Does it seem like the normal way of doing things from 20…

It makes sense to me, and it's a phenomenon I've noticed myself. Now that I think about it, though, I can't come up with any good examples off the top of my head where the middle of the market has truly been abandoned.

In tech, Apple comfortably occupies the premium end of the market, and other companies tried to move in (think Microsoft with the Surface) but with fairly limited success. With cars, the move has been to bigger, more luxurious vehicles, but you still have lower end models at various levels of trim. I have noticed it with, say, dentists, where sole traders and small businesses have essentially been replaced by franchises. Same for chemists.

To me the driving factor is that not everyone can compete on price, and competing for the luxury segment of the market is a fairly obvious alternative strategy. It also goes hand-in-hand with other factors like sustainability, where it might be impossible to make your product cheaply because you source local or recycled materials, or you make a product that is designed to last longer, so your customers don't return to buy your product as frequently.

I'd say the last 7-8 years I've noticed a move to luxury products in most markets just as a general trend. I call it the affordable luxury phenomenon. But I think a lot of it has been driven by cheap credit, and luxury goods makers reaching down into the middle market (the aspirational market) as much as the middle market being abandoned.

Re: Private equity is buying everything from vet offices to tech conglomerates

#348

Post by motohagiography »

motohagiography wrote: post #265
maximinus_thrax wrote: post #231

Earlier quoted context omitted.

Very curious how you conduct the research. I'm legitimately interested as at some point I almost accepted an offer from a company and one of my friends stopped me telling me that they're PE managed. Is there an easy systematic way of finding out without having to read public filings? How do you decide? Based on the ownership shares? Board members?

What's hard about reading filings that are literally public? The only barrier is english literacy, a solved problem. Crunchbase tells you any public funding rounds, and then if a PE group acquires more than something like 10% they have to make an SEC filing. (if I'm wrong about that threshold, the internet will correct me.) I should disclose that early in my career I would do job interviews recreationally on my lunch…

I wasn't happy with the tone of that on a re-read. Last few sentences are good. Happy to contribute any additional details if helpful.

Re: Private equity is buying everything from vet offices to tech conglomerates

#349

Post by awaythrow483 »

hospitalJail wrote: post #4
awaythrow483 wrote: post #3

If you want to understand what went wrong with America, start with private equity

Lobbying/Bribery seems more egregious than investing. At least investing has some economic forces that cause people to conserve resources and allocate them better than prior. Lobbying/Bribery is just pure corruption. The medical industry is so extravagant because they are among the top lobbyists of all time. Only the entirety of real estate or all US businesses(chamber of commerce) can even compete with merely the Am…

Where does the money for all of that lobbying come from?

Bribery has and will occur in every society. Lobbying is so bad in the US because certain groups have basically unlimited money

Re: Private equity is buying everything from vet offices to tech conglomerates

#350

Post by CatWChainsaw »

jrochkind1 wrote: post #109

I feel like private equitys game plan is generally to make a good profit while making employers and customers both miserable. So... this is great for our society.

This has been capitalism at large since the days of "there's no such thing as society." and I mean that literally. When the edict became shareholder value over all else, the nosedive began and now we get to feel it in earnest.
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