Moody’s says private equity is not evil when it comes to jobs

26 Jun

The best companies to work for in difficult times are not the ones that you might think.  In fact, the so-called demons of destruction may actually be the best bet if you want to keep your job.


What do I mean?  Well according to  Moody’s Investor Service private equity companies, those same companies that have been so reviled in recent months, are actually less likely to liquidate in troubled times.  Rather than the commonly thought adage that private equity firms are so driven by profit that they’ll simply cut jobs at the first sign of trouble it seems that in the more than a thousand situations examined by the Moody’s study companies that were owned by private-equity that defaulted on their debt were much more likely to preserve jobs than their counterparts.


This means that private equity firms are more willing and able to stick with trouble companies than other owners, meaning that the company- and the jobs attached to it- are more likely to survive.   This fits with what private equity companies have been telling us already.  Co-founder Henry Kravis puts it nicely when he says, “I love the ability to work with very good managers, and to provide the right incentives for them, and truly become a partner with that management, and make that management take a long view.”


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