Name: Len Carmichael
Company: Sunnyside Corp.
What is the ideal objective of private equity in the American economy?
Private equity fills the financing void created when traditional sources (e.g., banks) are unwilling or unable.
How is private equity designed to meet that objective?
Private equity is able to effectively evaluate whether an investment offers an acceptable risk adjusted rate of return and is capable of sourcing funding.
Please give examples of both how it has lived up to and failed to meet that objective.
Private equity most often is an enabler of the "success story" -- good things happen that likely would not for lack of necessary funding. The dark side of PE is those transactions that "fee-up" and / or gut a company to the point of failure -- sometimes with the PE stakeholder still walking away with a healthy return on the investment.
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