Breaking Points with Krystal and Saagar is a fearless anti-establishment Youtube show and podcast with over 1.58 million subscribers.
In this episode, BP correspondent James Li sits down with economic analyst and SCP Fellow Rachel Wasserman to discuss Trump’s executive order opening up 401k plans to private equity. Private equity is a type of investment where firms pull money from wealthy individuals and institutions to buy companies usually outside of the public market. Over the past many decades, private equity has promised outsized returns by taking companies private, loading them with debt, improving their operational efficiency and selling them later at a profit. But with rising interest rates and frozen exit markets, that model could be under serious stress.
So, what are the implications of making this type of investment available to retail investors and their retirement plans? Rachel walks James through how private equity works, what’s so dangerous about the buyout-private equity model and who might get left holding the bag.
Speakers
James Li
Correspondent, Breaking Points
Rachel Wasserman
Corporate lawyer and SCP Fellow
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