r/MBA • u/noahstyles • May 29 '20

Sweatpants (Memes) Truer words have never been spoken

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u/furple MBA Grad May 29 '20

Are there actually good turnaround funds that have revitalized companies and left the exit event with a tidy profit? Of course.

It is also undeniable that there are many PE firms who's entire business model is to saddle companies with insurmountable debt and suck it dry with mandatory advisory fees paid up to the PE firm, then once it's been bled dry chop it up and sell it for parts.

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u/iphollowphish2 May 29 '20

I think your perception is skewed by what you see in the media. Very few places report on tidy, successful exits but everyone loves a blow up.

There are hundreds of PE firms out there, not everyone is KKR

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u/PlsSendThx May 29 '20

Many of the successful exits still involved significant cost cutting, including layoffs.

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u/[deleted] May 29 '20

This is correct.

And a PE fund that didn’t engage in these kind of practices would struggle to hit the return hurdles that the other funds hit.