Part 15/17:
Beyond performance and fees, ethical questions about the social impact of private equity loom large. Investigations into investor-owned chains of dental clinics have raised concerns about prioritized profits over patient care, with reports of unnecessary procedures and compromised quality. Similarly, buyouts of fragmented markets—such as healthcare chains, schools, and restaurants—potentially diminish competition, inflate prices, and compromise service standards.
Additionally, the industry has historically thrived during periods of declining interest rates, which subsidize its leverage-heavy models. Now, with rising interest rates and increased borrowing costs, the industry’s financial structure faces significant headwinds, casting doubt on the sustainability of its growth strategy.