Josh Kosman returns to once again talk about the Private Equity industry, an industry many of us have little knowledge of and an industry that greatly impacts all of us.
The facts are that the number two private employer in this country is a Private Equity firm, KKR, and among the top ten private employers in this country five of those companies are PE companies. There is no question that PE firms have a direct impact on our economy and thus should be on the radar screens for anyone following the economy.
I asked Josh Kosman to come back on the show to give us an update on PE since we last spoke and to my surprise they are making a dramatic comeback. The reason is simple, with the Federal Reserve keeping interest rates far below the natural rate of interest the investment managers at pensions and mutual funds are looking for some yield to meet the hurdle rate (minimum acceptable rate of return) that is mandated by the fund.
In effect, the Fed is pushing money right into the hands of the very PE firms that saddle good American companies with debt while gutting the infrastructure at the same time. It is a deal that leaves the companies unable to compete internationally and makes the US less competitive as a result. Hopefully Josh can give us some good news that things are changing...
Buy the book "The Buyout of America" by Josh Kosman