Join the PEC Network

Join the
PEC Network here.

Focus On:

What's Wrong With "The Buyout of America"

In a new book, New York Post reporter Josh Kosman takes aim at the private equity industry, arguing that a wave of portfolio company defaults will trigger the next great credit crisis.

But in trying to make his case, Kosman relies on a series of misstatements, half-truths and selective citations that don't stand up to detailed scrutiny.

What's Wrong with Kosman's Book

PE by the Numbers_2007

• Equity investments by PE firms in 2007: $234 billion
  ^{(Source: Preqin)}

• PE funds raised in 2007: $518 billion
  ^{(Source: Preqin)}

^{Click graph to enlarge}

• PE transactions in 2007: 2,238
  ^{(Source: Preqin)}

^{Click graph to enlarge}

• Average PE equity contribution in 2007: 32 percent
  ^{(Source: Preqin)}

• Five largest industries by PE investment in 2007: Telecom; Finance; Energy; Retail; Healthcare
  ^{(Source: Preqin)}

^{Click graph to enlarge}

• Cumulative net profits returned to investors through 2007: $1.12 trillion
  ^{(Source: Preqin)}

• Average annual returns to investors from top-quartile PE firms 1980-2005: 39 percent
  ^{(Source: PEC analysis of data from Bloomberg and Venture Economics)}

• Share of investments in top 100 PE firms from pension funds, endowments, foundations since 2005: 70 percent
  ^{(Source: Preqin)}

• Number of PE firms in U.S.: 1,100
  ^{(Source: Thomson Reuters)}

• Number of PE firms worldwide: 2,140
  ^{(Source: Thomson Reuters)}

• Total value of private equity transactions in 2007: $721 billion
  ^{(Source: Preqin)}

^{Click graph to enlarge}

• Number of years PE firms hold onto portfolio companies on average: 5
  ^{(Source: World Economic Forum)}

• Rate of job growth above industry average at new U.S. facilities built by portfolio companies: 6 percent
  ^{(Source: World Economic Forum)}

• Organic revenue growth contribution to overall increase in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of PE portfolio companies: 49 percent
  ^{(Source: Ernst & Young)}

^{Click graph to enlarge}