In The News: How Private Equity Firms Will Profit From COVID-19 (The American Prospect)
Unless Congress and regulators act, private equity will shed its nonperforming assets and feast on new ones. J. Crew is the latest example.
Tag Archives: Hedge Funds and Private Equity
NEWS RELEASE: Private Equity Looting Drove J. Crew Bankruptcy
Private equity firms loaded J. Crew with debt and hid assets away from investors and creditors.
FACT SHEET: J. Crew Succumbs to Bankruptcy after Private Equity Debt, Financial Looting
Preppy retailer cannot survive retail and coronavirus economic downturn saddled by private equity-imposed financial burdens.
NEWS RELEASE: Decision to Block Private Equity Takeover of Dot Org a Victory for Nonprofits
Yesterday, the Internet Corporation for Assigned Names and Numbers (ICANN) rejected the proposed private equity takeover of the Public Interest Registry (PIR), the non-profit that manages the non-commercial, charity, and non-profit internet domain registry for all Dot-Org websites. The decision recognized that the private equity debt loads and extractive business model would hinder Dot-Org’s ability to serve its non-profit clients without raising prices, compromising service, creating new revenue streams that comprise users’ data and privacy, or otherwise imposing unfair costs on 10 million organizations.
Fact Sheet: Private Equity Vultures Eye Real Estate During Coronavirus Crisis
Now, with 26 million workers unemployed and countless businesses closing indefinitely, private equity firms are salivating at the potential business opportunities that might arise from the expected economic fallout. Unless we take immediate action to prevent it, private equity firms will take advantage of this unprecedented crisis to make even greater asset grabs.
“Coronavirus distress is the ‘opportunity of the century’ for real estate investors,” according to a recent headline in The Real Deal, a New York real estate news publication. The article quotes Meridian Capital Group’s David Schechtman saying “But I will tell you, real-estate investors — when you take the emotion out of it — many of them have been waiting for this for a decade.”
Blog Post: Wall Street’s Secret Pet Profiteering
More and more as we go about our lives, the money we spend is siphoned off to enrich Wall Street firms. Private equity’s pet profiteering is just one way these investors have taken over so much of the economy and our daily lives.
Policy Recommendations: Critical Post-CARES Act Financial Policy Steps to Respond to the Coronavirus
Americans for Financial Reform released a set of financial policy recommendations for Congress to fix the problems and loopholes in the CARES Act, to further protect and support individuals, families and communities in the face of this crisis, and to lay the groundwork for an equitable and sustainable economic recovery.
Comment Letter: Comments on Federal Reserve Emergency Facilities
Together, these facilities could deploy up to $2.3 trillion in new credit to the economy during the pandemic crisis period. Without major changes these facilities will not be effective in getting assistance to those most impacted by the crisis, and disclosure and transparency regarding specific borrowers and loan terms is lacking. Our comment provides specific recommendations to address these issues.
Joint Letter: No Bailout for Private Equity
Congress needs to resist calls from private equity executives to gain access to pandemic-related bailout programs. Private equity-owned firms are not comparable to ordinary small businesses, who cannot draw on deep-pocketed Wall Street owners who could support them if they chose to do so. Private equity (PE) funds are pooled investment funds managed by Wall Street firms that purchase operating companies. Prominent examples of private equity-owned portfolio companies include Toys ‘R Us, Shopko, and TeamHealth.
The track record of private equity funds demonstrates that these firms will wherever possible seek to divert income streams, including government support, to wealthy private equity executives rather than supporting employment and customer service at portfolio firms.
Letter to Regulators: AFREF-EFF Letter to FTC on Private Equity takeover of .ORG
“PIR LLC will have to generate substantial additional revenue to service the debt which could force PIR LLC to take advantage of its monopoly position to raise prices to unsustainable levels, impose new service charges, reduce technical upkeep that could impair web connectivity or non-profit email traffic, or pursue other business strategies that could undermine the independence of non-profits including suspending or transferring domain names, in effect a censorship-for-profit strategy that has been used by other domain registries and internet companies.”