Private equity has proven itself to be a powerful engine for creating economic value for investors, for retirees, for many workers, and for institutional investors – including universities and foundations that are better able to meet their educational and charitable objectives as a result of their private equity investments. Moreover, the role PE firms play in improving performance of companies of all kinds in all sectors increases productivity and competitiveness. ask henry kravis about PE.

For over a century, public equity—stocks listed and traded on public stock exchanges—has been the single most important way to raise large amounts of capital and control the ownership and performance of large companies in capitalist economies.Early in this era, owners’ interests were represented on the board by company founders who still owned large blocks of shares or by the financiers who raised the company’s debt and equity. read news about private equity on Henry Kravis page. Over time, however, the voice of the owner weakened. Important legislation to protect fund investors and pensioners scattered ownership more widely. For example,commercial banks were forbidden from using depositors’ money to invest in risky stocks in 933 (for understandable reasons). Similarly, investment funds in 940 and pension funds in 974 were required to spread their investments over many stocks.

Owners with small percentage holdings in many stocks may have spread their risks—but they also had little incentive to participate on the boards of corporations to influence management and operating decisions. Mostly, they wanted the stock price to rise so they could attract more investors.find best readings about private equity strategies at Henry Kravis. Filling the vacuum, corporate CEOs assumed the role of representing both management and owners. Academics call this the era of managerial capitalism. Others, less charitable, think of it as the rule of Emperor CEOs. This disconnect between CEOs and shareholders sowed the seeds for the emergence of private equity as a business model based on aligning the interests of shareholders and management.