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The dark secrets of private equity


If the book is clear on one thing, it is that private equity firms believe they are incredibly valuable to society. Khajuria asserts that industry austerity is necessary to achieve noble ends. Private equity firms pump capital into dying businesses, he writes. They donate extensively to philanthropic causes. They promote a broader mission of diversity, equity, and inclusion. All of these arguments figure prominently in
two and twenty, which notes that while “the scale of wealth created in the industry may tilt the discussion unfavorably in some circles,” private equity is “a far cry from the stereotypical image of excess often heard on Wall Street about private equity. In fact, he is closer to the image of a responsible anchor of the economy, an industrial stalwart.”

Khajuria emphasizes that private equity firms take money from retirement funds and grow it for future retirees. They are, he writes, the “responsible custodians of ordinary workers’ money,” acting with the “blameless goal of helping investors like … retirees whose pension funds form one of the foundations of the investment community.” To some extent, self-justifications of this kind are true: if private capital collapses, so do retirees, whose holdings are heavily invested in industry funds. But the notion that private capital is somehow the gatekeeper of ordinary workers’ pensions doesn’t exactly square with the industry’s relentless habit of slashing their pensions. In a draft deal, the company conducts a cost-cutting analysis for an insurance company, suggesting that employee pensions “may be reduced to the lower end of targets set by regulators.”

Despite its many omissions, two and twenty he is sometimes surprisingly candid about the psychology of a workforce dedicated to making a profit. Khajuria describes the Firm’s fledgling associates as “deep down…eager for life-changing money and power.” Khajuria also suggests that the founder of the firm, which “gives generously to a wide range of humanitarian and philanthropic causes,” is motivated by the goal of being “greedy for the long haul.” At the office, “everyone looks a bit serious,” he writes, and “even when they share a joke or a smile, every emotion is somewhat measured and nearly every word spoken is deliberate.”


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