Private equity guide.In 2007, the IUF published a A Workers' Guide to Private Equity, a 36 page A5 brochure, aimed at IUF affiliates and trade unions and their members around the world. Available in English, French, German, Spanish and Swedish, it remains an indispensable guide for trade unionists. Click here for more details and to order your copies.

August 10, 2018

US pension funds and private equity: enormous fees, poor returns

An article in the UK Financial Times from August 6 reports in these words on the conclusions from a new study of US private equity fees and returns since 2006: "US private equity managers have extracted $400bn in fees and expenses from investors since 2006 but on average they failed to beat the returns from an S&P 500 tracker fund."

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December 27, 2017

KKR, the new boss at Unilever spreads

Unilever has officially announced the sale of its spreads division to US-based private equity investors KKR for EUR 6.825 billion, some 8 billion US dollars. The sale can only be finalized when it clears regulatory procedures, but there should be no competition issues: KKR is a private equity fund, not a food company, and its current portfolio includes no spreads manufacture (a full list of KKR-owned companies, past and present, is available here).

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February 28, 2017

Unilever, Kraft Heinz and swimming with sharks

It took only 48 hours for Unilever to fight off a USD 143 billion Kraft Heinz takeover bid; the shock waves will reverberate far longer at Unilever and beyond. By using Kraft Heinz as the vehicle to swallow whole a far larger company, private equity investors 3G Capital - the driving force at Kraft Heinz, AB InBev and Burger King - have again demonstrated the scale of their imprint on the food industry and 'fast-moving consumer goods' sector as a whole.

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July 29, 2016

Emergency services turn life-threatening under US private equity owners - and a global Trade in Services Agreement would globalize the damage

Private equity funds have surged into US ambulance and firefighting services, with disastrous, even life-threatening results, documented in a recent New York Times article.

Following the Obama administration's health care reform, privately equity funds bet on increased outsourcing and a rapid expansion of revenue. They shopped for emergency service companies, bought them in deals which were loaded with debt, piled on more debt to suck out cash and were unable to deliver basic service when the bet soured. Frantic cost-cutting ensued.

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May 12, 2016

New report documents private equity fee racket

A new report by the US Center for Economic and Policy Research, "Fees, Fees and More Fees: How Private Equity Abuses Its Limited Partners and U.S. Taxpayers", documents the astronomical profits appropriated by the funds through abusive fee practices which damage workers and their pension funds, real-economy businesses and taxpayers.

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March 04, 2016

Private equity the new shadow banks?

The IUF began documenting the evolution of leveraged buyout funds into multi-faceted financial conglomerates - and the risks this posed to workers and to financial regulation - even before the great financial meltdown, which accelerated the trend. A recent article on the Naked Capitalism website (The New Shadow Banks: Private Equity Becomes Private Credit) details the ways in which "private equity funds, whose business model depends on high levels of borrowing, have gone into the shadow banking business to supplant banks as their debt suppliers."

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November 06, 2015

Plunder, profit and private equity - a Trojan horse and the future of regulation

Ancient Greek myth tells the story of the Trojan War, according to which Greek soldiers defeated the city of Troy they had besieged for ten years by means of a giant wooden horse in which soldiers were concealed. The unwary Trojans, thinking it a gift, brought the horse into the city and out popped the soldiers, who pillaged the city, murdered the inhabitants and left Troy in ruins. A Luxembourg court will shortly decide whether the alleged looting of a Greek mobile phone company by two large private equity funds, Apax and TPG, was a financial Trojan horse carried out by fraudulent means.

That decision will presumably impact on a civil lawsuit by the same creditors which will be heard in a US court next year. But it should also serve as a warning to what the financial vultures circling a Greek economy bled dry by successive 'bailouts' may bring. And it should prompt a fresh look at the EU's Alternative Investment Fund Manager Directive (AIMF Directive), which ostensibly safeguards against 'asset stripping' by private equity investors, in view of another potential leveraged buyout bubble.

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August 03, 2015

Largest US public pension funds have 'no idea' of fees paid to private equity managers

The UK Financial times reported on July 12 that Calpers, the California public employee pension fund with over USD 300 billion in assets, has 'no idea' how much has been paid in fees and carried interest to its private equity managers over the past 25 years.

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September 12, 2014

Burger King's debt whopper is a public subsidy to fast food poverty

Thousands of fast food workers across the US again walked off the job and engaged in civil disobedience actions on September 4, pushing low-wage work and the need for an increase in the national minimum wage further up the political agenda. Shortly before, announcement of a proposed merger between US-based Burger King and Canada's Tim Hortons "fast-casual" sent both companies' shares into the stratosphere. What's the connection?

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March 14, 2014

Heinz, Mondelez and the private equity effect

Private equity dominated the February Consumer Analyst Group of New York (CAGNY) conference, even without a formal presence - a measure of the extent to which the buyout funds' operational methods have permeated the food industry. While leveraged buyouts have not yet recovered their pre-2008 scale or volume, the big buyout houses emerged from the meltdown bigger than ever as complex financial conglomerates for whom pillaging companies is only part of the business of buying and trading everything. But private equity is not a closed universe. The funds' substantial footprint in the processed food industry, as elsewhere, has brought into the mainstream the financial engineering and aggressive cost-cutting developed through decades of leveraged buyouts.

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