Private Equity Is Looting 3,600 American Companies and Calling It Capitalism

Let Me Ask You Something

Can you name a single company where the customer experience actually improved after private equity took over? I have asked this question publicly, and I am still waiting for an answer. Because I cannot think of one. Not one.

Yet somehow this model keeps rolling along, consuming businesses, loading them with debt, gutting their workforces, and then looking for the next sucker to buy the hollowed-out remains. And we are supposed to call this capitalism.

The Two Ways Private Equity Destroys a Business

I have been covering this racket since 2006. The playbook has not changed. There are two main moves:

• The slash and flip. Buy a company, cut everything that does not generate a quick return, and sell it at a marked-up valuation before the cuts catch up with the business. Employees get crushed. Customers get worse service. The PE partners get rich.
• The debt bomb. Buy a company that has zero debt, a healthy balance sheet, a real business. Then borrow enormous sums of money against that company’s own assets. Now the company owes the debt, not the PE firm. The company slowly bleeds out servicing loans it never needed. Eddie Lampert pulled this with Sears. Sears is dead. Lampert is fine.

This is not capitalism. Capitalism creates value. This extracts it.

They Are Coming for Your Financial Advisor

Here is where it gets personal for you as a consumer. Private equity is now aggressively buying up registered investment advisors. Your financial advisor might already be owned by a PE-backed platform, and you probably have no idea.

I get the pitches myself. “Chris, take some money off the table. Smart move. Great valuation.” My answer is no every single time. Because I know what comes next. The moment PE walks in the door, the pressure shifts from serving clients to maximizing assets under management and extracting fees. Your advisor starts answering to a boardroom instead of to you.

Things you need to do right now:

• Ask your advisor directly if their firm has PE ownership or investment.
• Read the fine print on any changes to fee structures or service models.
• Watch for sudden staff turnover at your advisory firm. It is often the first sign that PE has changed the incentives.
• Trust your gut when service degrades. It is not an accident.

3,600 Companies and a Closing Exit

Right now, 3,600 companies in this country are locked inside private equity portfolios. The PE firms that own them are desperate to sell. The low interest rate window that made leveraged buyouts profitable has closed. The debt those companies are carrying has not gone anywhere.

This is a slow-motion crisis that is already affecting the prices you pay, the services you receive, and the jobs that exist in your community. The Kendall Roys of finance, young MBAs with no real-world operational knowledge, are running companies they do not understand into the ground.

I have been saying this is not capitalism for twenty years. At some point, enough people need to hear it clearly. Financial engineering that destroys businesses and harms consumers is not a market triumph. It is a system rigged against everyone who is not already in the club.