Aswath Damodaran: What Is Private Equity All About? (#investing, #PrivateEquity)

NYU Stern corporate finance professor Aswath Damodaran has a good summary of the types of private equity investors that exist in the financial markets, how they add value through their corporate activism and what motivates them on his blog in “Private Equity: Hero or Villain?“:

Here is an indisputable fact. If you are a stockholder in a publicly traded company, the entry of a private equity investor into your stockholder ranks is good news, since stock prices go up substantially.

Overall, a useful post for anyone looking to understand the basics of private equity, just don’t pay too much attention to his naive suggestion that the political problem facing this country is potentially just “mismanaged” government.