Where's the Equity in Private Equity: Langone joins Jensen and Metrick in assessing private-equity boom
August 1, 2007
For more information, contact: Benjamin Haimowitz, HHaimowitz@aol.com
Public Affairs Forum:
Where's the Equity in Private Equity?
TIME & PLACE
Monday, Aug. 6, 2007, 2:30-4:30
Philadelphia Marriott Hotel, Grand Ballroom F
Margarethe Wiersema, University of California, Irvine
Michael Jensen, Harvard Business School
Ken Langone, co-founder Home Depot, CEO Invemed Associates
Andrew Metrick, Wharton School, U. of Pennsylvania
This public-affairs forum addresses a trend of vital concern to the general public as much as it is to business scholars - the phenomenal growth in the privatization of public companies during the past few years. Despite agreement on the extraordinary nature of that growth, there are markedly opposing views about whether it bodes well or ill for the corporate world, the national and global economies, and society at large.
Some observers present a picture of greed run amok, of privatized companies gouged by exorbitant payouts and fees and overburdened with debt, of workers summarily laid off in large numbers. Others say the private-equity industry brings value-adding strategies and techniques to bear in company management that public firms can't match.
Seeking to bring some much-needed perspective to this controversial subject, this forum brings together two top scholars in corporate finance and govermance and one of the most dynamic and controversial figures of the U.S. business world.
A former director of GE and the New York Stock Exchange where his staunch defense of Richard Grasso's $190 million pay package made him a target of Eliot Spitzer, 71-year-old Ken Langone continues to serve on the board of Home Depot and Yum Brands; runs Invemed Associates, a small investment bank he founded; and serves as the chairman of the board of New York University Medical Center, one of the leading such centers in the country.
Joining Mr. Langone will be the legendary Michael C. Jensen of Harvard Business School and Andrew Metrick of the Wharton School, University of Pennsylvania. Prof. Jensen's 1989 article "Eclipse of the Public Corporation" is widely seen as the intellectual precursor of the current private-equity boom.
Among the questions to be posed to this remarkable panel by the forum's chair, Prof. Margarethe Wiersema of University of California:
-- Is the boom in private equity more a legitimate response to an overregulated, overstressed corporate sector or is it more the latest example of the fleecing of individual investors in financial markets?
-- Is it really the case, as private-equity proponents claim, that companies are better equipped to compete when privately held than when publicly held?
-- What will be the effect of the current private-equity boom on the world economy?
-- Considering the questions that have been raised about the private-equity industry's lack of transparency, exorbitant fees, and unfair tax advantages, is it time for government to play a more intrusive role in this field than it has in the past?
- Media Coverage:
- BusinessWeek.com. Jack Welch: "Cerberus Hit a Home Run". (Monday, August 06, 2007).
- BusinessWeek.com. The Joy of Private Equity. (Wednesday, August 08, 2007).
- NYTimes.com. Langone: Private Equity Is About a "Quick Buck". (Thursday, August 09, 2007).