The second item in the bag of tricks, after that dive, you can go so many places with this conversation. In a sale leaseback, the private equity firm will direct the company to sell its underlying assets and then lease it back. The company that emerges from private equity ownership may just not be as strong or as valuable a company as it was when it entered. But sale leasebacks are a way to make a quick hit of money in the short term but it can be a drag on the company in the long term.
If you want to maximize the value of your home for decades, you might update the kitchen. But if your time frame is one week, then you might burn down the house. Brendan Ballou is a federal prosecutor and special counsel at the Department of Justice, where he led the antitrust division’s work on private equity. He's also authored a new book, “Plunder, Private Equity’s Plan to Pillage America.” Ricky Mulvey caught up with him to talk about: - The techniques many private equity companies use to generate short-term returns - A key misunderstanding about the fall of in-person retailers - Private equity’s impact on medical billing, bakeries, and insurance Companies discussed: CG, KKR, BX Host: Ricky Mulvey Guest: Brendan Ballou Engineer: Tim Sparks
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