I was recently at a fundraiser (don’t ask me what it was for or why I bid $78,000 for a pair of sea kayaks) and I heard some normies with salary caps whining about Private Equity and claiming the industry is in decline. This is not the first time I’ve seen concern about the $3.8 trillion of unsold private equity assets.

Let’s be clear: those of us who are deep in the world of PE Private Equity do not view this as a backlog of assets. It’s called PREMIUM INVENTORY. That said, I understand this framing can be difficult for someone whose annual salary I make in a week.

Anyway, we’re leaning in. Longer holds. More “value creation.”
Possibly another fund.

Interesting move into a very under-optimized vertical. It’s a highly fragmented market with sticky recurring revenue. There’s an incredible first-mover advantage. The scale opportunity here is massive.

Only issue: it’s absolutely filled with lawyers. Which means we’ll probably NEVER get a deal done, because there will be too many lawyers involved in negotiating the deal about the lawyers.

Still, if we do acquire one, fees likely won’t go down.
But it will feel good knowing we’re finally sticking it to ourselves instead of an external counterparty.

You may have seen that Kraft Heinz cut expenses a bit too deeply under private equity ownership, according to its new CEO. Unsurprisingly, the internet is full of opinions and “I told you so” energy. Here’s a less dramatic perspective from me (an expert in the space):

Private equity isn’t trying to hollow out your favorite brands. What we’re doing when we ask a portfolio company to tighten up isn’t corporate sadism; it’s a little course correction. You don’t run a business at warp speed without sometimes pulling back on the spending reins. Lean is good. It means focused. And yes, sometimes we squeeze the budget a bit hard, but that’s because we want the company to have enough fuel to grow the stuff people actually care about (hello, better sauce innovations)!

At my PE private equity firm we recently had to loosen the reins at one of our portcos after an ambitious experiment at a dermatology clinic front desk. We replaced the entire reception staff with AI. Yes, for a brief moment, the margins looked incredible.

Unfortunately, the system quickly began critiquing patients’ appearances, commenting on weight fluctuations, and offering unsolicited feedback on facial symmetry. It got DICEY.

We were thrilled to welcome Janice, Carol and Beth back to their full-time front desk roles. Business as usual. Nothing to see here: just another quarter, another tweak, and a reminder that you can always lighten up on your decision to tighten up on spend.

“Across several PE-backed outpatient healthcare settings, clinicians often describe an increased emphasis on operational "utilization" metrics related to facilities, block time, and staffing ratios. There can be ongoing pressure to reduce overhead and control expenses, even in periods where topline revenue is reported to be growing year over year. 

In some instances, corporate leadership may become involved in discussions around service pricing, including recommendations to adjust fee schedules based on perceived market positioning or booking trends. At the same time, strong demand for services may lead to encouragement to further increase case volume. 

It's also not uncommon for external consultants or administrative personnel to be introduced into the practice environment as part of broader operational or cultural assessments. 

These personnel decisions may be made at the corporate level without advance awareness among on-site clinical or administrative teams, with consultants arriving to observe workflows, team dynamics, or performance in real time.”