Private equity parasitism – a useful introduction

The Naked Capitalism blog is launching a useful series of posts on private equity funds (like Carlyle or Mitt Romney’s Bain Capital). The initial post points out that private equity funds’ great returns are wildly overstated, except for the fund managers who do scandalously well for themselves. There is also the useful reminder that most of the money for private equity’s predatory buyout funds comes from government pension funds.

Public pension funds, and the pension funds of workers generally, are a potential source of public-minded investment, as Robin Blackburn — among others — has pointed out, but right now all of that capital is a profit center for well-placed parasites.

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