Seven well-chosen private equity case studies

Book review: The Good, the Bad and the Ugly of Private Equity Anybody wanting to know more about the private equity industry should find something that appeals in Sebastien Canderle's book.

Dr Matthew Partridge
By
published
in Features

The-Good-The-Bad-&-The-Ugly-150

The Good, the Bad and the Ugly of Private EquitySuccess and Failure in Buyout LandSebastien CanderleCreateSpace, £12.99Buy on Amazon

Private-equity deals have an image problem. Critics claim that funds load companies up with debt, squeeze all the value out of them, and then sell up and move on, leaving others to pick up the pieces. The industry insists that its success depends on making genuine improvements at the companies it invests in.

The Good, The Bad and The Ugly of Private Equity: Success and Failure in Buyout Land, by Sebastien Canderle, appraises seven high-profile deals, including Blackstone's purchase of Hilton Hotels, which eventually paid off for Blackstone, the purchase of Toys "R" US in 2005 by a consortium led by KKR and Bain Capital, which ended in bankruptcy and the closure of most of the stores last year, and Philip Green's acquisition of BHS, which ended in disaster for his reputation and the livelihoods of both staff and pensioners.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The case studies are well-chosen. At times, however, the emphasis on the financial architecture of a deal obscures the wider issue of whether the private-equity owners improved or worsened the firm's operational performance. Still, those employed in the industry, potential investors intrigued by private-equity funds, and general readers simply wishing to know more about the industry, should all find something that appeals in this book.

Dr Matthew Partridge
Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri

Latest