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The guy pictured above, Harvey Schwartz, is the chief executive of Carlyle, one of the world's largest private equity firms. He is emphatically not a "Mr. Malaise," where "Private Equity" is concerned. In fact, going into 2025, Schwartz predicted a banner year for "Private Equity." As it happened, that prediction was way off the mark.
I found out about Schwartz' failed prediction by reading an article in the December 24, 2025, edition of The New York Times. In fact, my blog posting title today is really just a reworking of the title on that New York Times' story. Here's The Times' version: "Once Wall Street’s High Flyer, Private Equity Loses Its Luster."
I do not pretend to be an expert on "Private Equity," or on the stock market in general, but I do, I think, get the basic idea. "Private Equity," as Wikipedia tells us, is "stock in a private company that does not offer stock to the general public. Instead, it is offered to specialized investment funds and limited partnerships that take an active role in managing and structuring the companies. In colloquial usage, 'private equity' can refer to these investment firms rather than the companies in which they invest."
Here is my non-expert commentary. "Private Equity" is, in both its operation and design, an investment that is focused on one thing only: will the company in which the investment is made go up in money value? Can we sell the company later for more than we bought it for? People like Mr. Schwartz, and others who do business in private equity, are not interested in a company because of what it makes, or does. They are interested in the company only with the idea that the price someone is willing to pay for the company will increase over what the private equity investors paid.
This is, by the way, the exact opposite of the investment formula promoted by Warren Buffett, generally considered to be the world's most successful investor. One online source explains Buffett's investment philosophy this way:
He looks at each company as a whole, so he chooses stocks based solely on their overall potential as a company. Buffett doesn't seek capital gain by holding these stocks as a long-term play. He wants ownership in quality companies that are extremely capable of generating earnings. When he invests in a company, Buffett isn't concerned whether the market will eventually recognize its worth. He's concerned with how well that company can make money as a business (emphasis added).
In other words, someone who is considered to be the "best" investor tries to buy companies and invest in companies that will be successful "as a business." "Private Equity" focuses only on whether the price of the business purchased will go "up." How the actual business does is of secondary importance.
It is my belief that investors who focus on "money," on "price," as opposed to focusing on investing in enterprises which are well-managed and doing a good job in their business, are undermining our economy. Ultimately, the "Private Equity" focus is self-defeating, and as the billionaires and their wanna-be imitators drive investment decisions, jobs are eliminated, and businesses are run into the ground.
Maybe, paying attention to "Mr. Malaise" will end up being a good thing for our economy. I'd like to think that might be the case! Letting "Private Equity" determine the fate of our economy is putting our bet on the wrong horse.
https://www.nytimes.com/2025/12/23/business/private-equity-stock-market.html
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