What is private equity?
Event Information
With Charlie Eaton, Associate Professor of Sociology, UC Merced
Private equity investment funds command increasing wealth and reach in the U.S. economy, yet the scope and role of PE remain ambiguous. A new working paper from Charlie Eaton, Albina Gibadullina, Marie-Lou Laprise, and Adam Goldstein assembles systematic data to provide a descriptive anatomy of PE’s shifting strategies and ownership patterns in the U.S. since the 1980s.
In this talk, Eaton will present the authors’ theory of PE through an analysis of four interconnected roles — “corporate raider,” “main street invader,” “shadow owner,” and “monopoly-builder” — and the changing balance among them over time. He’ll show that the industry’s traditional role has been replaced with corporate raiders that specialize in restructuring publicly traded firms. Today’s PE investors increasingly focus on agglomeration and rationalization of already private “main street” companies. PE-owned companies also increasingly stay private through longer hold times and sales to other PE funds. Ultimately, PE’s expansion has helped spread the logic of shareholder value maximization to ever-more corners of the economy, but without the relative transparency and regulation of publicly traded companies.
About the speaker
Charlie Eaton is an economic sociologist and associate professor at the University of California, Merced. He investigates the power of elites in politics and the economy, as well as policy and organizational strategies to rebalance power and wealth towards ordinary people. His book, Bankers in the Ivory Tower (University of Chicago Press, 2022), is about the relationship between financialization, student debt, inequalities in higher education, and the rise of financiers among U.S. billionaires. The book won the Pierre Bourdieu Best Book Award from the American Sociological Association.
In his latest research, Eaton examines how billionaires from finance and from big tech adopted more oligarchical roles in U.S. politics. The project experiments with machine learning methods for assembling data on billionaire social networks. Eaton writes about this research in his Substack newsletter, “Axis of Oligarchy.”
Eaton’s writing and research have been featured in the New York Times, Washington Post, LA Times, Wall Street Journal, New York Review of Books, Los Angeles Review of Books, Marketplace, CBS, CNN, and PBS. His academic research has been published in journals across the social sciences, including American Sociological Review, Review of Financial Studies, Social Forces, Socio-Economic Review, Sociology of Education, Politics & Society, P.S. Political Science and Politics, Research in Higher Education, Sociological Compass, and Socius.