Good Story in NYT on Private Equity

[davelj]

This story basically chronicles the history of Simmons Mattress Company and its various private equity owners over the years.

http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=1&ref=business&pagewanted=all

This is an extreme example of PE silliness (it’s extremely rare that a company has five different PE owners over a 20-year span), but it does show how dumb the banks were over the years as they just allowed the new owners to pile more and more debt on top of the company.

It also displays (something most folks already know about) how a large part of the PE industry – although not all of it – is merely a compensation scheme for executives. And where “value creation” is concerned, we learn again that “leveraged beta does not equal alpha.”

[werewolf34]

Anytime you hear the word ‘special dividend’ run away

BTW what makes people think that bankers know how to run a real business anyway? Unless there’s a bailout at the end of it all.

[werewolf34]

Anytime you hear the word ‘special dividend’ run away

BTW what makes people think that bankers know how to run a real business anyway? Unless there’s a bailout at the end of it all.

[werewolf34]

Anytime you hear the word ‘special dividend’ run away

BTW what makes people think that bankers know how to run a real business anyway? Unless there’s a bailout at the end of it all.

[werewolf34]

Anytime you hear the word ‘special dividend’ run away

BTW what makes people think that bankers know how to run a real business anyway? Unless there’s a bailout at the end of it all.

[werewolf34]

Anytime you hear the word ‘special dividend’ run away

BTW what makes people think that bankers know how to run a real business anyway? Unless there’s a bailout at the end of it all.

[desmond]

Are private equity firms the next Madoff?

[desmond]

Are private equity firms the next Madoff?

[desmond]

Are private equity firms the next Madoff?

[desmond]

Are private equity firms the next Madoff?

[desmond]

Are private equity firms the next Madoff?

[Author]

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