Business Insight Zone

For the autonomy, for the fast decision cycles, and for the chance at huge paydays — among other benefits. Carol Hymowitz has the dope in her latest In the Lead column at WSJ (no subscription needed for this one).

Fast Pace, High Stakes Lure Business Chiefs to Private Equity

Hymowitz’s story would have been a boon to me about a year ago, when I was making an appearance for Hoover’s on CNBC. The anchor and I went through the segment as planned (for spots like that, you always have an outline to work from), talking about executive moves that Hoover’s had been tracking. Maybe they had time to fill before the commercial break, because the anchor threw me a curveball. The CNBC folks had been discussing private equity buyouts before I came on the air, so they gave me credit for being an all-purpose business pundit and asked me why I thought executives would want to take their public companies through the buyout route. I managed to say something (which might have sounded intelligent, but only by accident) about stepping out of the spotlights shone by the SEC and public investors, especially when you know that a company needs rebuilding. They seemed to like that answer.

Now, a year-plus later, private equity is bigger than ever, and far bigger than I would have imagined in early 2006. If you want to understand some of what’s at stake in these buyouts — as well as the reasons that private-equity shops believe they can wring so much more value from companies — check out the Hymowitz piece. Given the rate of private equity buyouts these days, it’s only going to become more relevant over time.