Why Private Equity Buyout Funds have High Investment Returns
In July 2019, Elizabeth Warren said this
Her argument is that private equity is to blame for the closing of some of the biggest household name retailers: Shopko, Toys-R-Us, Sears, and Gymboree.
Whether or not this is just strategic messaging for her presidential campaign or if she genuinely believes it, her claims deserve a deeper look. What is private equity? How does private equity make money? And are they responsible for these retailers going bankrupt?
When you think of Wall Street, you think of big banks, hedge funds, trading floors, and a maybe Gordon Gekko or Jordan Belfort. But the chance that you have heard about private equity if you are unfamiliar with finance is pretty slim.
And there is a reason for that. If you are not in the center of a global economic crisis (big banks), crafting ways get large returns (hedge fund), or having insane parties in your office after a successful year (Jordan Belfort), then it’s unlikely that the media or Hollywood cares about you. And private equity fits that box.
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DISCLAIMER: This video is not official financial advice. We are not licensed financial advisers and are not advocating for purchasing any securities mentioned in this video or any other videos posted by How Money Works. Always do your research before purchasing any securities.
