Lyn Alden: Private equity-backed businesses face higher failure rates due to leverage - Traders Union
Lyn Alden: Private equity-backed businesses face higher failure rates due to leverage - Traders Union
Source: Traders Union
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DW NOTE
Private equity loads companies with debt, strips assets, and calls it operational improvement. Alden's observation isn't novel — it's the empirical record. KKR's portfolio companies defaulted at three times the rate of comparable firms during the 2008 crisis. Apollo's retail holdings filed bankruptcy at five times the sector average in 2020. The model works exactly as designed: extract fees and dividends before creditors realize the math doesn't close.