RESOURCES

Private Equity Resources

 

Overview

 

• Levintova, Hannah. “The Smash and Grab Economy.” Mother Jones, May + June 2022. Part of a multi-part series, this article describes the increasing role over time of private equity in our daily lives.

 

• More Perfect Union. “How Private Equity Plundered The American Economy | Ft. Adam Conover.” YouTube 7 Mar 2022 (18 minutes). A video introduction to private equity investments and the leveraged-buyout strategy, including how this strategy can negatively impact workers and health care quality. Argues for transparency and unionization as solutions.

 

• Scigliuzzo, David. “Private Equity’s Latest Deal Wave Brings More Leverage Than Ever.” Bloomberg, 13 Jan 2022. Explains that the amount of debt, or “leverage,” that private equity firms place on acquired companies has increased over time.

 

Workers and Jobs

 

• Abhattarai, Abha. “Private equity’s role in retail has killed 1.3 million jobs, study says.” Washington Post, 24 July 2019. Coverage of a report that found that more than 1.3 million Americans have lost their jobs in the past decade as a result of private equity ownership in retail. Includes stories of those impacted.

 

• Morgenson, Gretchen. “Working for companies owned by well-heeled private-equity firms can mean lower wages for employees.” NBC, 9 October 2021. Article asserting that private equity ownership of companies has been associated with lower wages.

 

• Primack, Dan. “Private equity takeovers result in significant job losses.” Axios, 7 October, 2019. Coverage of a study by Josh Lerner of Harvard Business School and Steve Davis of the University of Chicago describing how private equity takeovers result in significant job losses. This is significant because private equity regularly defends its employment record by citing a 2011 study by the same two authors.

 

• Gurley, Lauren Kaori. “Some Understaffed PetSmarts Are Dealing With Freezers Overflowing With Dead Pets.” Vice, 9 Mar 2022. Describes private equity firm BC Partners’ 2014 acquisition of PetSmart and how the acquisition resulted in cost-cutting, deteriorating working conditions, and harm to pets.

 

• Dayen, David. “Cut Off Private Equity’s Money Spigot.” The American Prospect, 28 Jul 2022. Describes how private equity fund managers use leveraged buyouts to increase their own wealth, while harming workers as well as business earnings. Provides background on federal legislation that has benefited private equity firms and policy recommendations.

 

Health Care

 

• Olson, Laura Katz. Ethically Challenged. Johns Hopkins University Press, 2022. Describes the increasing role of private equity in health care and how the profit motive can lead to lower quality care.

 

• Pearl, Robert. “Private Equity and the Monopolization of Medical Care.” Forbes, 20 Feb 2023. Explains how private equity firms cut costs in medical care by eliminating support staff, swapping MDs for less expensive clinicians, pressuring clinicians to provide more and/or unnecessary medical care, and gaming the insurance system.

 

• Scheffler, Richard et al. “Soaring Private Equity Investment in the Healthcare Sector: Consolidation Accelerated, Competition Undermined, and Patients at Risk.” American Antitrust Institute report. 18 May 2021. The authors conclude that the “private equity business model is fundamentally incompatible with sound healthcare that serves patients.”

 

• Kannan, Sneha, Joseph Dov Bruch, and Zirui Song. “Changes in Hospital Adverse Events and Patient Outcomes Associated With Private Equity Acquisition.” JAMA, 330, no. 24, 2023. Summary New York Times article. The authors compared private equity-acquired hospitals to matched control hospitals and found that being private-equity owned was correlated with a 25 % increase in in-hospital adverse conditions among medicare patients.

 

• Borsa, Alexander, et. al. “Evaluating trends in private equity ownership and impacts on health outcomes, costs, and quality: systematic review.” BMJ, 2023, 382:e075244. The authors reviewed 55 studies spanning different types of healthcare settings and found that private equity ownership was associated with increased costs to patients or payers and mixed to harmful impacts on quality.

 

• Brown, Erin C. Fuse, et. al. “Private equity investment as a divining rod for market failure: Policy responses to harmful physician practice acquisitions.” Brookings, 5 Oct 2021. Full Brookings report. Summarizes arguments for and against private equity ownership, noting that market consolidation and the exploitation of loopholes for profit are also problems associated with ownership by growing health systems and insurers.

 

• Seifert, Robert. “How Can States Protect Residents Harmed by High Hospital Prices?” Community Catalyst. Nov 2023. Explains strategies by private equity firms to consolidate health care markets and boost their earnings — strategies that increase costs for patients — along with state-level policy solutions.

 

• Appelbaum, Eileen and Rosemary Batt. “Private Equity Buyouts in Healthcare: Who Wins, Who Loses?” Institute for New Economic Thinking Working Paper Series No. 118. 15 Mar 2020. Shares examples of private equity firms consolidating smaller providers, loading them with debt, and exiting with a profit.

 

• Taggart, Kendall, et. al. “The Private Equity Giant KKR Bought Hundreds Of Homes For People With Disabilities. Some Vulnerable Residents Suffered Abuse And Neglect.” Buzzfeed, 5 Apr 2022. GItHub Repository here. Buzzfeed conducted a year-long investigation of private equity firm KKR’s purchase of BrightSpring Health Services and found deteriorating care for patients, worsening working conditions for staff, increased staff departures, and increased citations. Set off a congressional probe of KKR.

 

• Scully, Vincent, Jr. “Private Equity Harms Autism Service Market.” Spectrum News. Opinion column. 1 Mar 2023. Provides examples of harmful practices in private equity-owned autism treatment facilities that aim to increase profits, including excessive caseloads, lack of training, lower quality or “cookie-cutter” learning plans, and overbilling of hours.

 

• Braun, Robert Tyler, et. al. “Association of Private Equity Investment in US Nursing Homes With the Quality and Cost of Care for Long-Stay Residents.” JAMA Health Forum. vol. 2, no. 11, 2021. The authors found that private equity ownership of nursing homes was associated with higher costs and more preventable emergency department visits.

 

• Gupta, Atul, et. al. “Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes.” NBER Working Paper 28474. 2021. Using patient-level medical data, the authors showed that private equity ownership of nursing homes was correlated with a 10% increase in mortality, as well as higher costs, lower patient well-being, declines in staffing and declines in adherence to care standards.

 

Housing

 

• Financial Services Committee of the US House of Representatives Majority Staff to Committee Members. Memorandum regarding hearing entitled, “Where Have All the Houses Gone? Private Equity, Single Family Rentals, and America’s Neighborhoods.” 8 Jun 2022. Memorandum describes research findings that large investors tend to purchase homes in neighborhoods with larger Black populations, lower home values, and higher rents; to outcompete first-time homebuyers; to raise rents; and then to sell the homes in bulk to other institutional investors.

 

• Vogell, Heather. “When Private Equity Becomes Your Landlord.” ProPublica, 7 Feb 2022. Report describes how private equity firms’ drive for profit can be at odds with renters’ interests.

 

• Christophers, Brett. “How and Why U.S. Single-Family Housing Became an Investor Asset Class.” Journal of Urban History, vol. 49, no. 22, 2023. Article explains why single family housing became attractive to institutional financial investors around the Great Recession.

 

• Ellen, Ingrid Gould and Laurie Goodman. “Single-family rentals: trends and policy recommendations.” Brookings report. 2023 Nov. Discusses the limited research on large institutional investment in single family home rental properties and provides policy recommendations, including the adoption of rental registries.

 

• Fallon, Katie, Owen Noble, and Kathryn Reynolds. “Institutional Owners in Single-Family Rental Properties: A Review of the Federal and Local Regulation and Policy Landscape.” Urban Institute Report. 2023 Aug. Reviews federal, state, and local policies intended to address institutional owners of single-family rental properties and the limited research on the effects of these policies.

 

• Henderson, Tim. “Investors Bought a Quarter of Homes Sold Last Year, Driving Up Rents.” Stateline, 7 Jul 2022. Describes how investors in single family homes tend to raise rents and how they have been particularly active in Black and Latinx neighborhoods in Sunbelt states.

 

• Bhattarai, Abha. “‘We’re all afraid’: Massive rent increases hit mobile homes.” Washington Post, 6 Jun 2022. Explains the role of private equity and other corporate investors in the mobile home market and how these investors make mobile homes less affordable for people earning low incomes.

 

Pensions

 

• Gillers, Heather. “Retirement Funds Bet Bigger on Private Equity.” Wall Street Journal, 10 Jan. 2022. Explains that state and local pension funds are investing more and more in private equity: pension funds invest about a quarter of their funds, or $480 billion, in private equity, a 60-percent increase from 2018.

 

• Phalippou, Ludovic. 2020. “An Inconvenient Fact: Private Equity Returns & The Billionaire Factory.” University of Oxford, Said Business School, Working Paper, 10 Jun 2020. Reports findings that private equity funds failed to outperform public equity indices (i.e., the stock market). He argues that creative accounting by private equity managers has made private equity seem like a better investment than it really is.

 

• Aubry, Jean-Pierre. “Public Pension Investment Update: Have Alternatives Helped or Hurt?” Issue in Brief 22-20, 2022. Chestnut Hill, MA: Center for Retirement Research at Boston College. Shows that alternative investments (private equity, hedge funds, real estate, and commodities) have not increased pension returns but may have reduced volatility.

 

• Corkery, Michael. “Pensions Get Bolder in Challenging Private Equity on Investments’ Human Cost.” New York Times, 8 Oct 2018. Describes how public-pension leaders are increasingly questioning  investments in private equity firms that cause harm to workers.

 

• Baik, Brian K. “Private Equity Fund Valuation Management During Fundraising.” Harvard Business School. Working Paper 23-013, 11 Jan 2024. Summary article here. Finds that low-reputation private equity funds use tactics to inflate their reported earnings during fundraising periods and suggests that investors would lose interest in these funds if the investors knew their true (lower) value.

 

• Private Equity Stakeholder Project. “PESP Supports Securities and Exchange Commission’s Private Equity Fee Rule.” PESP News and blog, 4 May 2022. Article about PESP’s support of a rule that increases transparency for private equity investors and prohibits certain practices and fees that go against investors interests.