USA Today Article—Celebrate Private Equity

Ayn Rand Center's picture
Submitted by Ayn Rand Center on Tue, 2012-05-29 21:03

Don Watkins, a fellow with ARI, and Yaron Brook, ARI’s executive director, have just published a new article titled: “Celebrate Private Equity.” You can read it now at

ARC Media

With private equity, it is

Tom Burroughes's picture

With private equity, it is important that people draw distinctions. There is venture capital, where a VC investor/investors back a number of startups, taking majority/other stakes in firms on the hope that despite some duds or break-evens, there will be sufficient strong firms to generate a good return. This is the industry that typically helped propel the Googles, Ebays, Amazons and Skypes to greatness.

Then there are the buyout funds. In this case, a fund used a mixture of equity and debt financing to take over a publicly listed business, supposedly restructure it and later sell it or list it again on the stock market, making a profit on the deal - hopefully. Since credit markets locked up in 2008 such investments have declined sharply. Good capitalists should be wary of leveraged buyouts where the cheap credit was made available by central bank money printing rather than by the sort of prudent lending one would hope to see in a world of full, free market banking. And although some of the private equity buyout types (such as at Bain Capital, the Romney outfit) might have genuinely improved the efficiency of the system by their skills, a lot of this activity was pumped up by central bank funny money and not something that we classical liberals should applaud. The insane levels of debt leverage seen just prior to the 2008 market crash was a sign of a deeper problem.

Moi ...

Lindsay Perigo's picture

... I would prefer to think it bespeaks a realisation that Faecesbook is as arrested by the retards who use it as it is, paradoxically and admirably, technologically advanced. The place is an awful manifestation of the rule of the airhead and the drooling beast. Encouragingly, the brightest and the best seem to want to give it the wide berth it deserves. Faecesbook is a boon for banality, a cesspool of superficiality, to be despised by any person with a civilised bone in his body.

The Facebook IPO

Ross Elliot's picture

I'll admit I saw a--barely sustainable--analogy in the FB IPO and Francisco's Mexican investment strategy.

Fact is, people made their appraisals and have to live by them. Morgan-Stanley weren't trying to prove a point and I have no doubt that in the long term FB shares will make a good return.

Did the Mexican government invest heavily?


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