Capital Allocators – Inside the Institutional Investment Industry Sachin Khajuria and Brendan Ballou – Private Equity: Profit or Plunder? (EP.331)
Aug 7, 2023
In this discussion, Sachin Khajuria, a seasoned private equity veteran and author of 'Two and Twenty,' faces off against Brendan Ballou, a federal prosecutor and author of 'Plunder: Private Equity’s Plan to Pillage America.' They explore the dual nature of private equity—its potential to add value versus its flaws, particularly in legal frameworks. Topics include investment durations, operational risks, and ethical concerns. Their nuanced debate reveals surprising common ground, emphasizing the need for reform to ensure accountability in this industry.
AI Snips
Chapters
Books
Transcript
Episode notes
Private Equity's Evolution
- Private equity has evolved beyond leveraged buyouts, becoming a $12 trillion industry.
- It's a people-driven business where individuals act as principals, aligning with investor interests.
Critique of Private Equity's Legal Structure
- The legal structure surrounding private equity, not the people involved, is the primary concern.
- Incentives for private equity firms may not benefit workers, customers, or even other investors.
Investment Duration and Incentives
- Private equity investments typically last 3-7 years, influencing investment decisions.
- Leveraged buyouts and fee extraction can negatively impact companies.
