Tag Archives: Hedge Funds and Private Equity

Federal reserve board

Fact Sheet: Private Equity Industry Poised to Profit from the Federal Reserve’s New Lending Programs 

Private equity funds could access government assistance for their portfolio companies while avoiding any responsibility to repay any debt or obligations to the public purse. Private equity firms could also tap government aid to finance leveraged buyout purchases of additional companies, using public money to load target companies with debt and drain their assets while avoiding any responsibility for paying that debt back.

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.

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.