S7 E7: Gilded Age 2.0
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Modern "Investment" Is Just Asset Flipping
- Modern investment banking often doesn't involve deploying capital for new ventures like it used to.
- Instead, it focuses on acquiring existing assets and manipulating them to generate slightly more capital.
- This practice is often referred to as asset flipping and is exemplified by the private equity industry.
- Private equity firms acquire companies, often through leveraged buyouts, with the goal of increasing profitability or selling off assets for short-term gains.
- This can have detrimental consequences, as illustrated by the Toys R Us bankruptcy, a high-profile casualty of a private equity deal.
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