“Based on terms granted to similarly rated borrowers, and on our analysis of Bloomberg data on recent transactions, Simon & Schuster would have to pay interest rates above 9 percent,” wrote Andrew Park, senior policy analyst at Americans for Financial Reform. “That would cost the publisher nearly $100 million, about 40 percent of operating income in 2022, on interest alone. In raw financial terms, the transaction will weaken Simon & Schuster the moment it closes, never mind what KKR does as an owner.”
Carter Dougherty, Americans for Financial Reform communications director, says the size and reach of the private equity industry’s financial influence is having an impact on the housing market. “Private equity firms have assembled big real estate empires, and that’s one of the things driving housing prices in this country,” he explains. “Private equities buy a large number of homes in a certain area, and they have the financial muscle to muscle out homeowners who want to buy for the first time or they raise rents on people who end up renting from them,” Dougherty added.
“History clearly shows that unfettered growth in the name of capitalistic “success” results in sustained and growing inequality, human and planetary exploitation, and worse,” wrote Ericka Taylor, popular education manager for the Take on Wall Street campaign of Americans for Financial Reform. “Yet there are other models—many that come from Black, Indigenous, and other historically marginalized communities—that take a more holistic, symbiotic approach to growth.”
The new disclosures would benefit the millions of Americans with retirement savings in pension plans, Andrew Park, a senior policy analyst at Americans for Financial Reform, a financial sector watchdog group, told DealBook.
“Not only does the rule address a lot of informational gaps investors in private funds have had, it rightfully also goes after some of the most egregious behavior that funds have been able to get away with,” said Andrew Park, senior policy analyst at Americans for Financial Reform, referring to the curbs on those particular fees.
Alexa Philo, a senior bank policy analyst at the consumer advocacy group Americans for Financial Reform and a former examiner with the Federal Reserve Bank of New York, said the shift would restore needed guardrails that should have never been removed. “If the Fed says seven banks and two IHCs are going to be impacted, my reaction to that is that they should have been in those higher categories to begin with and their current categorizations are an understatement of the systemic risk they present,” Philo said.
