ABSTRACT
This chapter looks at some of the ups and downs of the private equity (PE) industry since the late 1980s. It examines the industry from a practitioner's perspective. In the late 1960s and 1970s corporate raiders sought out companies with undervalued assets. They scoured the markets for businesses that had saleable assets that were greater in value than it would cost to buy the company. The financial assistance prohibition effectively made it a criminal offence to asset strip companies in most countries. Deals came from three major sources: subsidiaries of larger companies, succession in family companies, and insolvency. There were very few public-to-private transactions in Europe in the first wave of buyouts. One of the practical issues in raising non-captive PE funds was to find a way to avoid double taxation that didn't create other complex liabilities. Tax is paid by people, companies, and other organizations that have a "tax identity.".
