Have a read

I have no love for PE (I left and I hated my time in the industry and think it has a a lot of problems) but this isn’t great journalism. It’s a lot of blanket statements, cherry picked examples, and worst of all lacks any real data that contextualizes the prevalence of these problems. I would have loved this if they had data directly illustrating these trends, instead the author just sort of uses a lot of hyperbolic language to decry the industry. If you want to make a point, don’t just provide anecdotal evidence. You need to provide real hard statistics and data so that way the prevelance of these issues can be truly quantified and understood. 

The other core issue is just a lack of basic understand that when a portco goes bankrupt, the PE firm loses money (which often includes the GPs own personal money)… even if they pulled a bit out through sale leaseback or dividend recaps. If the author took time to understand the financial model of PE (which isn’t hard to do - there are literally so many free resources on the internet), she could have made a much better argument.

On the PE returns point - she kind of ignores a big question which is, if the returns are so bad why are LPs giving PE firms money? LPs aren’t unsophisticated at all and they’re certainly not willing to pay fees when they can avoid it. Chalking it up to just “PE firms are manipulating and lying” doesn’t grasp the full complexity of why LPs like PE as an asset class and how they actually benchmark performance (hint: it’s not the SP500 that’s the only benchmark). 

The author should have spent more time on the management fees, 2/20, and taxes sections because I think there are interesting topics around that. There are also some interesting discussions to be had around how leverage warps incentives at portcos and the need for employee stock ownership programs. But none of this is probably as exciting to talk about as implying that people are sitting around a table scheming about doing extra root canals just to make money (which btw - a lot of small town independent docs / dentists overbill patients for unnecessary things way more frequently than any “corporate” practice with actual compliance policies). 

The continued references to WSO threads are also funny because this site is like 90% 18-22 year old college kids LARPing or people who don’t even work in finance. None of the anonymous titles are verified - the MD she’s quoting could be some 19 year old playing pretend. Bad quality source that is fitting for bad quality journalism. Oh and all the jargon that she references is wrong - I’ve never once heard someone say going “turbo”, which again makes me question the quality of the author’s sources.

I get the public hatred and fascination for PE, but it’s role in society is really nuanced given how large and diverse the industry has become now. Trying to create cardboard heroes and cardboard villains is entertainment and not journalism. You owe your readers honesty, thoroughness, and nuance so they can understand why things are the way they are and where the problems actually are (and there are real problems, they’re just boring to write about).