The Toys R Us bankruptcy and the private equity industry

There are 4,000 private equity firms in the world./nMost of them focus on the US./nThe ones that we are concerned about are the 30 really big ones./nThey use lots of debt and need to be able to both pay back that debt and get outsized returns, 20% returns is what they go f./nThe case of Toys R Us is an example of how this can go wrong./nToys R Us was still profitable when it was bought by the private equity firms, but it was not a distressed company and they loaded it up with debt.