Private Equity’s New Phase

Harvard Business

In phase one (buy and sell), PE investors looked for the equivalent of a “fixer-upper house” — a dilapidated company in a good industry that could be purchased at a discount and, after the business equivalent of some fresh paint and new appliances, resold for a profit. This phase was loosely called leverage buy out (LBO) from about 1979 to 1990 and included over 2,000 LBOs.

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