There’s a good chance that the person who chastises you for not flossing answers to folks who can’t stop talking about discounted cash flow.

Private equity (PE) funds now own a record number of US businesses—from dentists’ offices to carwashes and national bookstore chains. Firms like KKR and Blackstone have armies of vest-donning management pros that raise money from pension funds and other institutional investors to buy companies, give them a Bar Rescue-style revamp, and eventually (hopefully) sell them at a profit.

Over the last 15 years, the number of US companies under PE ownership more than doubled, from just over 6,000 in 2010 to almost 13,000 as of the end of 2025, and they currently account for about 7% of US GDP.

But as the industry’s grip on the economy grew, so did the ranks of haters pointing out cases where funds saddled businesses with debt and conducted layoffs, leaving them with degraded service. Pro-PE economists, meanwhile, say that acquisitions often save struggling businesses from bankruptcy by making them more productive, boosting employment, and delivering investors handsome returns.

But now, investors have soured

PE’s heyday—when it paid returns that leave the S&P 500 in the dust—is roughly the investor equivalent of your grandparents’ memories of when a gallon of milk cost a nickel. Rising interest rates in recent years have depressed the valuations of portfolio companies and made it more difficult for private equity funds to find buyers, delaying their ability to pay back investors:

• While company sales by private equity funds rose almost 5% last year, the total proceeds from the sales declined by 21%.
• From 2022 to Q3 2025, annual returns from an index of private equity funds were 5.8%—only about half of the S&P 500’s 11.6% during the same period, according to research firm MSCI.

In some cases, private equity funds have had to resort to controversial financial engineering to return money to investors.

Declining returns have made investors skeptical about shoveling more cash into the business buyout houses: Private equity funds raised 11% less money last year than in 2024. But signs of a rebound in dealmaking are making industry giants optimistic. PE-owned Medline completed the biggest IPO since 2021 late last year.

Retail investors to the rescue? President Trump recently signed an executive order to make it easier for Americans’ 401(k)s to invest in PE funds, saying that it would allow rank-and-file workers to capture the returns from these funds. But critics say that the industry needs Americans’ retirement piggy banks more than they need PE, arguing that private equity funds have far fewer transparency requirements than the stock market and that management fees eat up returns.—SK

Subway, Dunkin’, Arby’s, P.F. Chang’s, Denny’s, Buffalo Wild Wings, Jimmy John’s, Hardee’s/Carl’s Jr., Auntie Anne’s, Baskin-Robbins, Cinnabon, Moe’s, Panera, and Bob Evans all share a common ingredient: private equity (salt, too, probably).

Between 2014 and 2024, PE firms invested $94.5 billion in bars and restaurants, CNBC reported, citing PitchBook data. And while that cash can be a much-needed boon for a growing restaurant chain, it can also be a major source of indigestion.

The upsides of private equity: At its best, a PE investment can be like making a deal on Shark Tank. You get a big capital infusion, as well as some expertise on how to scale the business, operate more efficiently, and grow the brand. One of PE’s biggest success stories has been fast-casual eatery McAlister’s Deli. Per Restaurant Business Online:

• McAlister’s was acquired by PE firm Roark in 2005.
• By 2025, its system sales had grown 530%.
• It’s now worth more than $1 billion.

But PE acquisitions can also be a recipe for disaster. Nearly half of the restaurant and bar chains that filed for bankruptcy in 2024 were backed by private equity, per CNBC and PitchBook. Some of them were doomed, in part, by classic PE tactics, like leveraged buyouts. That’s when a PE firm borrows a ton of cash to buy a restaurant chain, then passes that debt onto the restaurant after the sale.

Then, there’s the tactic that cooked Red Lobster: sale-leasebacks, which involve a PE firm selling a chain’s real estate out from under it, then making the restaurant pay above-market rent.

PE firms currently making bread: Blackstone acquired sandwich chain Jersey Mike’s early last year for about $8 billion. Now, the company is looking to go public at a valuation of at least $12 billion, Bloomberg reported.—BC

Private financiers have cannonballed into the medical space in recent years because—as your insurance company will never admit to you—healthcare is a highly lucrative business in the US, representing 18% of annual GDP as of 2024.

To cash in, PE has invested more than $1 trillion in healthcare companies over roughly the past decade, in some cases providing needed resources to strained hospitals and other medical facilities. But since the goal is to juice investors’ returns, private equity is also notorious for doing almost anything in an attempt to turn a profit for owners. That often includes layoffs, which can have lethal effects in an industry tasked with saving lives:

• After acquisitions, PE-owned hospitals saw a 13% increase in emergency department deaths (compared to similar, non-PE facilities), most likely because full-time staffing at these hospitals fell by 11.6% on average, according to a recent study coauthored by Harvard researchers.
• The findings track with previous studies linking staff shortages to higher rates of infections at PE-owned inpatient wards and more deaths at PE-owned nursing homes.
• Many nurses say they’re stretched too thin to properly treat critically ill patients, and reports of dangerous supply shortages abound. In one highly publicized case, a woman died after giving birth at a PE-owned hospital that couldn’t stop her internal bleeding because the necessary supplies were repossessed for nonpayment, the Boston Globe reported two years ago.

That hospital was owned by Steward Health Care, a PE-owned company that was the largest private for-profit hospital network in the US before collapsing into bankruptcy in 2024. That year, PE-backed companies accounted for seven of the eight largest bankruptcies in healthcare, according to the Private Equity Stakeholder Project. Closures affect non-PE facilities, too, since they’re often forced to take on additional patients when a nearby hospital shutters.

Some states are taking action. Last year, Oregon barred anyone but healthcare professionals from owning a controlling stake in healthcare businesses.

Zoom out: Private financiers have similarly chased a boom in pet spending. At corporate-owned clinics, some vets have spoken of pressure to squeeze in more appointments. More morbidly, staffing cuts caused freezers of deceased pets to pile up at some PetSmart stores after the company was bought by a PE firm in 2015, Vice later reported.—ML

The New England Patriots made the type of history this year that you only read about in LinkedIn updates from your former frat bro in B2B sales: They became the first team backed by private equity to reach the Super Bowl (and the first team backed by PE to get bullied in a Super Bowl).

Whether it’s professional, college, or youth sports, private equity is getting into all areas of the game:

• There are 74 major professional US sports teams with ties to private equity. The NBA has the largest proportion of teams backed by PE (20 of 30), while the NFL and NHL have the lowest, with 10 of their 32 teams, respectively, having PE connections.
• PE made its first venture into college sports in December, when Otro Capital struck a deal with the University of Utah.
• Youth sports have also garnered attention, with PE investing in facilites, leagues, and uniform manufacturers.

The attraction of pro sports is easy to understand. With recent team valuations rising well into the billions, the pool of people who can afford a stake is getting shallower. The $6.1 billion sale of the Boston Celtics to Bill Chisholm last year included $1 billion from Sixth Street, a private equity firm that also owns a stake in MLB’s San Francisco Giants.

Waiting and seeing with college sports: Firms and schools will be keeping a close eye on how the Utah–Otro deal works as the NCAA navigates a Wild West of NIL rules. Otro’s reported $500 million investment, which includes help from donors, will allow it to manage several Utah athletic operations, including licensing and media.

Youth sports? Really? Ask any parent who has had to drag their kids across state lines for an all-day lacrosse tournament about how expensive it can be. In recent years, firms have poured billions into TeamSnap, a platform that facilitates the scheduling of games; Varsity Brands, an apparel-maker and organizer of cheer competitions; and IMG Academy, a boarding school that has graduated many future professional athletes.—DL

You might think you’re pretty good at following the money through the ruins of a Red Lobster, but PE firms have expanded their investment portfolios to include things you didn’t even know were for sale, such as vital ferry lines for the Isle of Wight and gas pump screens.

Here’s what else you didn’t know private equity owned:

Font libraries. In 2019, private equity firm HGGC bought Monotype—the company behind pretty much every iconic font you can think of—for $825 million. Monotype has since hoovered up other typeface companies, like its 2023 acquisition of Fontworks, which was popular among Japanese game developers. Last year, Monotype discontinued its $380 yearly licensing plan and rolled out a new one for $20,500.

Your tunes. The quickest way to substantial cash for megastars is selling their music catalog. OneRepublic frontman Ryan Tedder sold a majority stake in his 500+ songwriting catalog to PE firm KKR for $200 million in 2021. You either die buying or live long enough to become the sale: London fund Hipgnosis, which scooped up back catalogs of artists like Blondie and Justin Bieber, was acquired by Blackstone for $1.6 billion in 2024.

Screen time. Cocomelon, Colin and Samir, Dude Perfect, and Economics Explained are just a few of the powerhouse YouTube shows and channels that have sold to PE as the industry targets the low overhead, personality-driven media.—MM