How Is This legal?

Summary

Podcast Summary: The Dream – Episode “How Is This Legal?”

Podcast Information:

• Title: The Dream
• Host/Author: Little Everywhere
• Episode: How Is This Legal?
• Release Date: January 27, 2025

---

1. Introduction to the Episode

In the premiere episode titled “How Is This Legal?”, hosts Jane Marie and Dan delve into the pervasive influence of private equity in various sectors of American society. Highlighting the alarming similarities between private equity practices and pyramid schemes, the discussion sets the stage for an in-depth exploration of how these firms operate and the detrimental effects they have on businesses, employees, and communities.

2. Defining Private Equity vs. Venture Capital

Timestamp: [06:26] Jane Marie

Jane Marie initiates the conversation by distinguishing private equity from venture capital, a topic further clarified by their guest, Meredith Lynch.

• Meredith Lynch: “The biggest difference between private equity and venture capital is the debt. When private equity comes in, it's often about increasing the company's debt, whereas venture capital aims to propel a company forward with growth-focused investments” ([06:26]).

Meredith emphasizes that private equity typically invests in struggling companies, leveraging debt to restructure and ultimately sell parts of the business for profit. In contrast, venture capital focuses on long-term growth and development of new ventures.

3. Private Equity in Healthcare

Timestamp: [07:36]

The discussion quickly moves to the healthcare sector, where private equity firms have made significant inroads with devastating consequences.

• Meredith Lynch: “Private equity played a major role in 65% of the biggest corporate bankruptcies over a billion dollars in 2024, including companies like Red Lobster” ([02:30]).

One prominent example is Steward Health Care, where private equity involvement led to cost-cutting measures that compromised patient care. Meredith recounts instances where hospitals ceased paying vendors for essential supplies, resulting in critical shortages and even deaths.

• Meredith Lynch: “Emergency room nurses were forced to use cardboard boxes for bereavement instead of proper bereavement boxes because the vendor wasn’t being paid” ([12:52]).

The episode highlights how these practices not only jeopardize patient safety but also lead to the closure of vital healthcare facilities, leaving communities underserved.

4. Private Equity in Retail and Housing

Timestamp: [24:01]

Meredith expands the conversation to other industries affected by private equity, including retail and housing.

• Meredith Lynch: “Francesca's, a retail brand, faced issues with private equity not paying vendors, leaving the brand struggling” ([24:31]).

In the housing sector, private equity firms own approximately 1 million apartment units, leading to neglect in property maintenance and deteriorating living conditions.

• Meredith Lynch: “Apartment buildings owned by private equity often suffer from infestations and mold due to understaffing and inadequate maintenance” ([28:14]).

The cumulative effect of these actions exacerbates the wealth gap and diminishes the quality of life for countless individuals.

5. Private Equity and the NFL

Timestamp: [36:32]

The conversation takes an unexpected turn towards the NFL, illustrating the extensive reach of private equity.

• Meredith Lynch: “Private equity has entered the NFL, with 31 out of 32 team owners supporting the move” ([37:00]).

Despite concerns about the impact on team finances and community relations, the integration of private equity into major league sports raises questions about the future dynamics of these franchises.

6. Celebrity Involvement in Private Equity

Timestamp: [39:44]

Celebrity endorsements and involvement in private equity further legitimize and propagate its influence.

• Meredith Lynch: “Kim Kardashian and Tom Brady have launched their own private equity firms, Sky Partners and Cancelo Group, respectively” ([40:01]).

These high-profile associations not only attract more investments but also obscure the negative ramifications of private equity practices, making it harder for the public to recognize and challenge their detrimental effects.

7. The Culture and Ethics of Private Equity

Timestamp: [42:22]

Meredith critiques the pervasive culture within private equity, highlighting issues of transparency and ethics.

• Meredith Lynch: “Private equity firms often recruit from Ivy League schools, fostering a culture that prioritizes profit over people” ([42:22]).

The hosts discuss the lack of accountability and the normalization of exploitative practices, questioning the ethical foundation of such business models.

• Jane Marie: “Everything's a pyramid scheme, it turns out, dear listeners” ([20:17]).

8. Potential Solutions and Regulatory Measures

Timestamp: [17:19]

The episode concludes with a discussion on possible solutions to curb the negative impacts of private equity.

• Meredith Lynch: “There are movements in Congress to put guardrails on private equity, but political shifts could hinder progress” ([17:16]).

The hosts emphasize the need for stricter regulations and increased public awareness to mitigate the influence of private equity and protect vulnerable sectors from exploitation.

• Jane Marie: “We should all be concerned whether we have proximity to it or not” ([32:38]).

Notable Quotes:

• Jane Marie: “Private equity bankrupts a bunch of companies, kills a bunch of people. People lose their jobs. What's the upside here, guys?” ([02:16])

• Meredith Lynch: “Private equity is the investment of equity. These firms purchase ownership in private companies with the hope of increasing their value and making a profitable exit” ([08:14]).

• Meredith Lynch: “In the case of Steward Health Care, private equity caused hospitals to become renters of their own buildings, leading to insufficient care and vendor payments” ([09:37]).

• Meredith Lynch: “Private equity and prisons go hand in hand, providing subpar services and contributing to the abuse of incarcerated individuals” ([31:16]).

Conclusion

In “How Is This Legal?”, The Dream podcast exposes the shadowy operations of private equity firms and their pervasive impact across multiple industries. Through detailed examples and insightful analysis, the episode underscores the urgent need for regulatory intervention and heightened public awareness to address the systemic issues perpetuated by unchecked private equity practices.

Listeners are left questioning the sustainability of the American Dream in the face of such exploitative economic models and are encouraged to reflect on the broader implications for society and the economy.

---

Connect with Meredith Lynch: Meredith can be found on TikTok at meredithmlinch and continues to share insightful analyses on her podcast, Oddly Specific.

Have Your Say: The Dream invites listeners to participate by submitting their thoughts and experiences related to pyramid schemes and private equity. Call the tip line at 818-584-1421 to share your stories.

Transcript

[Thrive Market Ad]

Worried about what ingredients are hiding in your groceries? Let us take the guesswork out. We're Thrive Market, the online grocery store with the highest quality standards in the industry. We restrict 1000 plus ingredients so you can trust that you'll only find the best high quality, organic and sustainable brands all free of the junk. With savings up to 30% off and fast carbon neutral shipping. You get top trusted groceries at your door and you can stop worrying about what your kids get their hands on. Start [e-mail] podcast for 30% off your first order and a free gift.

[Jane Marie]

Welcome back to the Dream. Our new season where we get to talk about whatever we want. What we've been talking about a lot for the last, I think. What? How long, Dan?

[Dan]

Oh, God. Eight years, Seven years?

[Jane Marie]

That's a long time. Get a life. What are we doing? Anyway, we've been looking at multi level marketing pyramid schemes, essentially, which is a corrupt way to make money by pocketing money from an endless chain of people who want to make money by pocketing money from an endless chain of people who want to make money by pocketing money from an endless chain of. Big Ben, Parliament. Big Ben, Parliament.

[Meredith Lynch]

Hey, look kids, there's Big Ben.

[Jane Marie]

And there's Parliament, kids.

[Bombas Ad]

Big Ben, Parliament again, kids.

[Jane Marie]

Big Ben, Parliament.

[Meredith Lynch]

Look, kids, forget it.

[Jane Marie]

When you put your brain into any new world for too long, you start to see it everywhere. Remember, like when you first started playing Tetris, everything was a was a Tetris block or Tetri Tetrominos. That is not.

[Dan]

It's the name of the Tetris blocks.

[Jane Marie]

Why are you saying it like that? Tetrominos?

[Dan]

Because it's spelled like that.

[Jane Marie]

What is that supposed to mean? Like dominoes.

[Dan]

That's the only thing I can think of.

[Jane Marie]

Absolutely not. No, they're not called that anymore. Now they're called Tetris blocks. Yeah, it's official. They're Tetris blocks. Anyway, that's been happening around the office when it comes to pyramid schemes. Everything is now a pyramid scheme. There's somebody siphoning off all the money in a cheating way everywhere. Right, Dan?

[Dan]

Yeah, it appears that way.

[Jane Marie]

So this season I'm excited to dig into whether we're just being paranoid. First up, private equity. Do you watch Shark Tank?

[Dan]

I do.

[Jane Marie]

I wasn't asking you. I wasn't asking you.

[Dan]

I'm the only other person here.

[Jane Marie]

Do you watch Shark Tank? Yes. I put the pause in just because I was like trying to see if you would do it again. Okay, I'm gonna try this A different way. You watch Shark Tank? We all do.

[Dan]

Including me.

[Jane Marie]

No, I don't either. Shark Tank, very popular TV show where venture capitalists meet with hopeful entrepreneurs, invest in their companies. So we all kind of. We get that framework of, I've got money, I'm gonna put it in your company, we'll all make money. Well, in recent years, it seems that alongside every story about those type of venture capitalists, there's a story about private equity, and they're kind of all mixed up. I always thought it was basically the same, but with some differences that would bore the crap out of me. Well, over time, with the help of today's guest, I've noticed that those stories about private equity firms are all kind of dark. Millions of job losses, 20,000 people dying when they shouldn't have in nursing homes. I mean, I know they're going there to die, but, like, this is when they weren't supposed to die. And those nursing homes being backed by private equity. And then there's the famouses who absolutely love private equity and start their own firms or partner with some established firm. Our best of our best and brightest, Kim Kardashian, Will Smith, Jared Kushner, Jared Leto, Ashton Kutcher, real business people of our time. Last year, 2024, private equity played a major role, according to their own industry reports, in 65% of the biggest corporate bankruptcies, over a billion dollars. So, like, companies that had lost a billion dollars and needed to, like, get bailed out, 65% of those were private equity, like Red Lobster. So the question is, how is that a thing? Just like with MLMs. How is that a thing? It looks like a pyramid scheme, smells like a pyramid scheme, walks and talks like a pyramid scheme. How is that a thing? Private equity bankrupts a bunch of companies, kills a bunch of people. People lose their jobs. What's the upside here, guys?

[Meredith Lynch]

My name is Meredith Lynch. I am a content creator, I am a writer, I am a comic, and I host a podcast called Oddly Specific, which is the only podcast that covers everything from private equity to Pete Davidson.

[Jane Marie]

Meredith comes with a very particular set of skills. She talks about pop culture stuff, but in the course of digging into controversial or gross pop culture things that rich celebrities are involved in, eventually she finds private equity or a shell company or just some super scammy thing that's readily available online. Like, you can look this stuff up.

[Dan]

Yeah, it's follow the money.

[Jane Marie]

Follow the money. So Meredith follows the money. So, yeah, I brought you on today to talk about private equity because until I started Paying attention to your work in that space, I realized I didn't really know what private equity was or how big of a problem it is in our society. I thought it was venture capital. So can you tell me the difference? My understanding is venture capital is like when someone gives Mark Zuckerberg a million dollars to start Facebook and then like 10 years later they get a billion back.

[Meredith Lynch]

That is not a bad way of putting it. And I always quote Pulitzer Prize winning journalist Gretchen Morgenson, who wrote a fantastic book about private equity. And she says the biggest difference between private equity and venture capital is the debt. So when private equity comes in, it's all about the debt of the company. Typically the company is already struggling, there might be a large amount of debt already and it's often about increasing that debt. Venture capital comes into a company and they want to, in general terms, grow that company. They want to put money in to propel it forward. And it's usually about making a long term investment. So there are times when venture capital can be problematic and have some of the same problems that we see with private equity. But on a whole, I'm not as concerned about it personally and I think that's all that matters.

[Jane Marie]

So let's back up just a little bit. You said something really interesting. But first I want to ask, is private equity like American thing?

[Meredith Lynch]

No, private equity is not an American thing. In fact, private equity is thriving in other parts of the world. In the UK in France, we see, you know, a lot of private equity companies in the uk. Just recently I've been doing a lot of research on a private equity company that is based in the UK and that is one of the largest owners of veterinary care.

[Jane Marie]

What?

[Meredith Lynch]

Yes.

[Jane Marie]

Okay. So, okay. It's a business that's gig is to find companies that are in debt and then increase their debt.

[Meredith Lynch]

Let me give you a quote, unquote, textbook definition of what private equity is. Yeah, I pull this definition from my friends at the Private Equity Stakeholder Project. They're one of the few nonprofits that is doing work to really keep an eye on private equity, to advocate for guardrails on it. Private equity is the investment of equity. So for those of us who like didn't pass college math, AKA me, that means money in private companies. So private equity firms go in and they purchase ownership in these private companies. So these are companies that you're not going to see on the New York Stock Exchange, etc. The hope for these firms that come in is that they can increase the, the value of what they purchased and then make a exit in a few years. So, for example, they will go into a company where they might see it starting to go downhill. They will be able to sell the parts of the company. That's one way that it works. So, for example, in the case of what we saw with Red Lobster, that was one that happened recently. They sold the land that Red Lobsters were on and basically made Red Lobster become renters of their own buildings.

[Jane Marie]

And then they're going to sell it back to them or sell it to somebody else entirely.

[Meredith Lynch]

They will sell it to someone else entirely.

[Jane Marie]

Okay.

[Meredith Lynch]

I mean, one of the biggest ones that we have seen recently is with Steward Health Care. It's no longer backed by the private equity company, but Service Capital Management is the equity company that came into Steward Health Care. They bought these hospitals that had to be sold by the Boston Archdiocese because of money that the Archdiocese had to pay back for victims of sexual abuse.

[Jane Marie]

Okay, yikes already. Yikes.

[Meredith Lynch]

Yes. And so they sold these hospitals to a private equity firm. And when these hospitals were sold in Massachusetts, firstly, there are hospitals that predominantly serve low income communities where access to health care is scarce. And I know that when people think of Massachusetts, they think of things like Mass General Hospital, Dana Farber Cancer Institute, and there are a lot of really wonderful, accessible medical institutions in Massachusetts. But there's also a lot of other communities that are not as well served, that are not on public transit, et cetera. So these were hospitals that were really important parts of the community. And when service came in, they said, don't worry, we're not going to come in and like, you know, drive them into the ground. But pretty quickly that's what they saw happening. And so again, that's another case where they sold off the land of these hospitals to, I believe it was Medical Properties is the name of the. Of who they sold it to. And then essentially the hospitals, you know, we're now forced to be to have a landlord. And we saw a lot of vendors not getting paid when these hospitals were sold to private equity. And so how did that work?

[Jane Marie]

Like, what was the mechanism there?

[Meredith Lynch]

So basically, you know, hospitals have several vendors. And so what private equity is notorious for is just, I'm going to say allegedly here not paying vendors. So. So let's say you have machines that have to be serviced. They weren't paying for machines to be serviced. They weren't ordering supplies that needed to be ordered to the point where there have been deaths that have been linked back to the lack of medical supplies for routine procedures, et cetera. There are cases of emergency room nurses talking about the fact that they would be out of things in the ER like medicines or diapers, and nurses would be forced in the middle of the night to go out to a 24 hour CVS. And perhaps one of the most egregious stories was that, you know, sometimes in the emergency room, the unfortunate case of a baby dying would happen. And the emergency room had been stocking these. They called them bereavement boxes. And so they were essentially something that the baby could be put in before they were taken down to the morgue for the family. Stewards stopped paying the vendor who made the bereavement boxes. So nurses were told to put the babies in cardboard shipping boxes to send to the morgue.

[Jane Marie]

Did that health company shut down entirely, or has there been one that private equity has come in and just completely destroyed?

[Meredith Lynch]

What happened with that one is eventually the private equity firm pulled out, which is what usually happens. Now the hospitals are shuttering.

[Jane Marie]

Wow.

[Meredith Lynch]

You know, they're trying to bring them back to life. Some other hospitals are taking these hospitals over, but this is really important care that is no longer able to be as easily provided as it was before.

[Jane Marie]

All right, everybody, let's all go to the lobby. Let's all go to the lobby. Let's all go to the lobby and get ourselves a treat.

[Verizon Ad]

Your old or broken phone can let you down when you need it most. But at Verizon, trade in any old phone from our top brands and get the most for it. Up to $2,000 in value for an amazing new iPhone 16 Pro with Apple Intelligence and a new line on my plan and iPad and Apple Watch Series 10. That's like a three for one. And you can get it on any plan. At Verizon, trade in your old phone for a brand new iPhone 16 Pro, iPad, and Apple watch. The other guys won't give you that. Visit verizon.com today. Additional terms apply. Service plan required for Apple watch and iPad up to $2,000. Value based on iPhone, iPad and Apple Watch.

[Warby Parker Ad]

If you wear glasses, you know how hard it is to find the perfect pair. But step into a Warby Parker store and you'll see it doesn't have to be. Not only will you find a great selection of frames, you'll also meet helpful advisors and friendly optometrists. Yep, many Warby Parker locations also offer eye exams. So the next time you need glasses, sunglasses, contact lenses, or a new prescription, you know where to look to find a Warby Parker store near you. Or to book an Eye exam. Head over to warbyparker.com retail worried about.

[Thrive Market Ad]

What ingredients are hiding in your groceries? Let us take the guesswork out. We're Thrive Market, the online grocery store with the highest quality standards in the industry. We restrict 1000 plus ingredients so you can trust that you'll only find the best high quality, organic and sustainable brands all free of the junk. With savings up to 30% off and fast carbon neutral shipping. You get top trusted groceries at your door and you can stop worrying about what your kids get their hands on. Start [e-mail] podcast for 30% off your first order and a free gift.

[Bombas Ad]

Bombas makes the most comfortable socks, underwear and T shirts.

Warning, bombas are so absurdly comfortable you may throw out all your other clothes.

Sorry, do we legally have to say that?

No, this is just how I talk. And I really love my Bombas.

They do feel that good. And they do good too. One item purchased equals one item donated.

To feel good and do good, go to bombas.com acast and use code acast for 20% off your first purchase. That's B O M b-s.com acast and use code Acast at checkout.

[Jane Marie]

Back to our conversation with Meredith Lynch. Okay, so it seems antithetical to business and capitalism to put money somewhere and then as you said, quote, unquote, run it into the ground. What is the business part of this? Like, how are they making money if they're just like ruining everybody's business?

[Meredith Lynch]

They do try to increase the profits by cost cutting. And so then that will be often at the expense of the employees, that will be at the expense of the clients. With the example of the bereavement box. Right. Let's say someone comes into the hospital and they unfortunately experience something like that. They're still going to get the same insurance bill. Right. But they might not be getting the same level of care.

[Jane Marie]

Right.

[Meredith Lynch]

Supplies are being by nurses who run out in the middle of the night and purchase. I'm going to use for this example, like diapers. Right. But essentially the hospital is still charging as if they still have these items.

[Jane Marie]

Okay. So they bring the costs down so that they pocket more of the revenue coming into the hospital.

[Meredith Lynch]

Sure.

[Jane Marie]

How are they not left holding the bag?

[Meredith Lynch]

Well, a big part of this is the fact that these are private companies. Right. So when companies are on the New York Stock Exchange, Wall street, etc. That doesn't make them perfect. And I want to say that, I want to emphasize that that doesn't mean that they're Great or amazing or whatever, but they are held to certain standards.

[Jane Marie]

They're a little more transparent.

[Meredith Lynch]

Exactly. These private companies, this is essentially modern day pirates, they can get away in some way scot free. The thing that we are seeing though now is in Congress, there are movements to put guardrails on private equity. Unfortunately, we are probably going to see a giant step back than that with.

[Jane Marie]

A new administration, with someone who loves private equity.

[Meredith Lynch]

Yes. And, you know, it's interesting. Trump is a friend to private equity. Jared Kushner has a private equity firm, and what we saw during the Trump administration is he made it easier for private equity to thrive.

[Jane Marie]

In what ways?

[Meredith Lynch]

Couple of ways. One of the biggest ways is that Trump made it easier for private equity to access pensions.

[Jane Marie]

What does that mean?

[Meredith Lynch]

So pension funds are one of the ways in which private equity gets money. And he made it so private equity could get into individuals pension funds in the sense that if you or I had a pension, we could invest it in private equity, which is a very risky decision for a.

[Jane Marie]

A layperson. A layperson who has a 401k. Yeah. Or whatever. Yeah, yeah, exactly.

[Meredith Lynch]

Like, it's not really for the unsophisticated investor. And so.

[Jane Marie]

Well, I have like my pie chart of my retirement. It's not great, but whatever, where it's like, put this much into stocks and bonds and da, da, da, da, da. But he made it easier for one of those slices to be private equity.

[Meredith Lynch]

Exactly. That's correct.

[Jane Marie]

Is there any version of that where I do make money?

[Meredith Lynch]

I mean, Jane Marie, is there any version of you going to Vegas and coming home a winner?

[Jane Marie]

Yeah, sure. It hasn't happened yet, but yes, I.

[Meredith Lynch]

Say put your whole, whole retirement fund into private. I'm feeling lucky.

[Jane Marie]

So are the people who run these firms just, like, incredibly savvy about making their exit at the right time and in the right way where someone else is left holding the bag? Like, how do they.

[Meredith Lynch]

It's hard to say if they're savvy or if they're scoundrels.

[Jane Marie]

Right. Welcome to the Dream, everybody. The show where we try to figure out if people are savvy or scoundrels.

[Meredith Lynch]

You know, it's such a. You know, oftentimes what they do is they sell to another private equity firm.

[Jane Marie]

Oh, it's a pyramid scheme.

[Meredith Lynch]

Exactly.

[Jane Marie]

Everything's a pyramid scheme, it turns out, dear listeners.

[Meredith Lynch]

Oh, no, they're all in it together. Like, they're actually getting along a lot better than people realize.

[Jane Marie]

Do you have any examples of that?

[Meredith Lynch]

There's emails that they were able to uncover of these firms in collaborating more than people would like to know.

[Jane Marie]

When did this start becoming a problem?

[Meredith Lynch]

I would say this started in the 80s with junk bonds. If people are familiar with the junk bonds of the 1980s. RJ Nabisco. This is basically what that is. Or if you would like a more pop culture reference, this is what Richard Gere did in Pretty Woman.

[Jane Marie]

Say more. I've never seen it.

[Meredith Lynch]

You've never seen Pretty Woman? Come on.

[Jane Marie]

No.

[Meredith Lynch]

Okay. All right. That's.

[Jane Marie]

You know, I've never seen Dances With. Well, there was an era there where I, like, wasn't allowed to see this stuff. And so then I would just rebelled and, like, I watched stuff my parents had never even heard of, you know, because I was. They were like, everything's too racy to be fair.

[Meredith Lynch]

I think it was probably a little racy when it came out for you to be watching. But, you know, essentially, this.

[Jane Marie]

I've never seen Dirty Dancing either.

[Meredith Lynch]

Oh, come on.

[Jane Marie]

I know. I don't know. It seems boring to me, but whatever. Okay, moving on.

[Meredith Lynch]

So essentially, this has been around since the 80s. It's the reason why a lot of people are familiar with Drexel, Burnham and Lambert, which was a day on Wall street where everything basically fell apart for junk bonds. And there's a fantastic book on it that I am making my way through. It's called the Predators Ball. And it's about how this happened. And it's the reason why a lot of people are familiar with Michael Milken, who. He calls himself a very successful businessman. He was the one sort of behind all of this. He went to prison for this. If you look in private equity now, a lot of the times when you see people who are very high up at other firms and you read their bios, you will often see that they got their start at that firm.

[Jane Marie]

And what are junk bonds? And if you can't answer this, I'll just make Dan tell me. So, Dan, can you explain what junk bonds are? Not the junk ones that are, like, in my grandma's junk drawer.

[Dan]

If you. Okay, I'm going to do this a different way. They're getting a little.

[Jane Marie]

Who's they?

[Dan]

Gemini. I'm using Gemini now.

[Jane Marie]

The robots.

[Dan]

The robots?

[Meredith Lynch]

Yeah.

[Dan]

I mean, you know, the robots have the information we need.

[Jane Marie]

Yeah.

[Dan]

Okay. Junk bonds are basically just risky loans. You know, just like anything else, you buy a bond, like a stock, the companies that issue them are typically at a higher risk of going bankrupt and not being able to repay the money. That's being borrowed. And to entice investors to take on that risk, these companies offer higher rates on their bonds.

[Jane Marie]

Okay. When the private equity firm, for example, comes into a healthcare system and decides to stop paying bills, is it just that they're like, not giving the hospital enough money and the hospital's making those decisions, or are they like, the point of contact between the vendor and the hospital?

[Meredith Lynch]

Usually it's that there's a middleman.

[Jane Marie]

Okay.

[Meredith Lynch]

That's the other great thing, right. You know, I was recently looking at, I think it was Francesca's.

[Jane Marie]

What is Francesca's? For those that may have not heard of it, it's all lowercase, right?

[Meredith Lynch]

Lowercase F. Francesca's is a Smaller Forever 21 that's a little more bohemian, I would say. So, you know, fast fashion, I would say it definitely had its, its heyday for a while. It had a lot of expansion. And lately we've been seeing a lot of stories where allegedly vendors have not been getting paid. And they're coming out and they're saying, I wasn't paid by Francesca's. Right. Like, you know, I am a vendor. I make these stickers and Francesca's stopped paying me. Well, when you look into it, Francesca's was or is still currently owned by private equity. And so to me, it's the private equity firm that's not paying them. But Francesca's the company and the brand is sort of left holding the bag.

[Jane Marie]

And the private equity people are just like, too bad. So sad you didn't read the fine print exactly. Okay. They seem cool. Hey, stick around. We'll be right back.

[Aura Ad]

Forever change the way you sleep. With the softest 100% organic cotton bedding from Boll and Branch, you'll fall asleep faster wrapped in the most luxurious comfort. You'll never sleep hot again. With blankets, duvets and sheets that feel breathable to sleep in. You'll experience pure comfort on night one and feel your bedding get softer with every wash. Take 20% off your first order during Bolen Branch's annual spring event at bolenbranch.com with code buttery limited time only exclusions apply. See site for details.

[Warby Parker Ad]

What makes a great pair of glasses at Warby Parker? It's all the invisible extras without the extra cost. Their designer quality frames start at $95 and including prescription lenses plus scratch resistant, smudge resistant and anti reflective coatings and UV protection and free adjustments for life. To find your next pair of glasses, sunglasses or contact lenses, or to find the Warby Parker store nearest you, head over to warbyparker.com that's warbyparker.com worried about.

[Thrive Market Ad]

What ingredients are hiding in your groceries? Let us take the guesswork out. We're Thrive Market, the online grocery store with the highest quality standards in the industry. We restrict 1000 plus ingredients so you can trust that you'll only find the best high quality, organic and sustainable brands, all free of the junk, with savings up to 30% off and fast carbon neutral shipping. You get top trusted groceries at your door and you can stop worrying about what your kids get their hands on. Start [e-mail] podcast for 30% off your first order and a free gift.

[Bombas Ad]

Bombas makes the most comfortable socks, underwear and T shirts.

Warning, Bombas are so absurdly comfortable you may throw out all your other clothes.

Sorry, do we legally have to say that?

No, this is just how I talk. And I really love my Bombas.

They do feel that good. And they do good too. One item purchased equals one item donated.

To feel good and do good, go to bombas.com acast and use code acast for 20% off your first purchase. That's B O M b-s.com acast and use code Acast at checkout.

[Jane Marie]

Back to our conversation with Meredith Lynch. So we talked about health care, we talked about fashion. Where else is private equity?

[Meredith Lynch]

We have private equity in housing. And I have a pretty good. Well, I have a pretty depressing, but a statistic on that that I'll share. Okay, so it's hard to tell because the other thing about private equity is it's quite sneaky. They don't have to disclose. Like you were saying, like, too bad. So sad. Right? But Americans for Financial Reform estimated in June of 2022 that private equity firms own at least 1.6 million units, which would account for 1 million apartment units, and the rest of that in single family homes and mobile homes.

[Jane Marie]

Whoa, that's a lot of houses.

[Meredith Lynch]

It is a lot of houses.

[Jane Marie]

What happens when they go into that market?

[Meredith Lynch]

Well, what we have seen is again, the decline. Especially like I've seen a lot of cases of apartment buildings, a lot in the Southern California area south of Los Angeles. These private equity firms will come in and then they're understaffing, you know, a large building that probably needs a big management team. And so things like infestation, mold, et cetera, all end up increasing because they're not taking the same care to the building.

[Jane Marie]

So they just siphon off the rent money and then bail at the exact right moment.

[Meredith Lynch]

Yes, essentially, that's the Goal.

[Jane Marie]

Oh, my God. What do they tell themselves? Like, what? Can you imagine? They tell themselves, like, the money's just there for the taking.

[Meredith Lynch]

I think that is it to some degree. I also think it's something that we've really normalized in American culture and in capitalism. I mean, from my experience, when I have conversations with people about private equity, sometimes they say to me, well, you know what, Meredith? It's not illegal. It's the cost of doing business. These people are smart and savvy, and some people view it that way. What ends up happening, though, is then people start getting affected by private equity, and then their tune starts to change. If you are not in it or you're not incredibly wealthy, you are most likely either being affected by private equity. Whether you say, oh, my gosh, Meredith, Panera Bread used to be so good, and it's not anymore. That's private equity right there.

[Jane Marie]

Wow.

[Meredith Lynch]

Yes. Or it's. My grandmother is receiving subpar care in her nursing home, and I just found out that it's actually owned by private equity.

[Jane Marie]

Mm. Do you find yourself nosing around when you read an article about some micro failure of a business? Do you look in the back office like, who's there? Is it private equity?

[Meredith Lynch]

Yes. And like, nine times out of ten, it ends up being private equity. Like, nine times out of ten, if I'm someplace and I'm like, why is it all mobile orders now? Why can't I just go to the cashier anymore? Why is it all an app? And then I'm like, who owns this place? And you do have to dig, because like I said, you don't have to disclose it the same way. Usually it's. It's private equity.

[Jane Marie]

Where do you go to dig?

[Meredith Lynch]

Well.

[Jane Marie]

Is that your next venture? Do we need to get some private equity behind an app that you're developing to find out who is in private equity?

[Meredith Lynch]

Bloomberg. Bloomberg is probably my best resource because oftentimes they will report out, you know, oh, this. This sale happened. So that's how I'm figuring out that private equity was involved in the purchase of something.

[Jane Marie]

It's not the About Us page.

[Meredith Lynch]

No, no.

[Jane Marie]

How big of a problem is this? I mean, let's say subjectively and objectively.

[Meredith Lynch]

To me, I don't like that my tax dollars fund prisons that are crawling with private equity and that private equity is providing sub care to human beings.

[Jane Marie]

Is that also another big sector?

[Meredith Lynch]

Private equity and prisons go hand in hand. Almost all of the health care, almost all of the food service, almost all of the commissary is provided by private equity in prisons. So like it is a problem and we should pay attention to it. But more so, we should also be looking at all of the privatization that is within prisons. So yeah, I don't want my money going to fund sub par care for incarcerated individuals. And let's say you want to start a bakery and you're competing against somebody who's got private equity money or private equity backing. How is that affecting the dream, if you will?

[Jane Marie]

I mean, don't we all have to deal with the consequences of private equity? And so shouldn't that make us all kind of concerned whether we have proximity to it or not?

[Meredith Lynch]

Yeah, I mean, I think the issue in why people don't push back against it more is that parts of it are reflective of the bootstrap mentality. American dream. Okay, so, well, you know what, this guy went to UPENN and he got in with the right people and he learned how to do private equity. Is that so bad? Shouldn't we be allowed to do that? Right, that is one mentality of it.

[Jane Marie]

Mm. Are there other sectors that you've found? Like we got healthcare, we've got veterinary clinics, we've got housing, we've got some retail stores, we've got prisons. Are we missing anything? Schools?

[Meredith Lynch]

One I'll give you that is in that vein is libraries.

[Jane Marie]

Oh, public libraries.

[Meredith Lynch]

Public libraries say more. So there is a company, they're called Library Systems and Services. They are private equity backed company and what they do is they come into libraries and they take over a lot of the, what they call. Oh, it's all the stuff you don't want to do. So that would be the administration, the hr, even just like the purchasing of books and what community programs to offer. And they're very proud that they're the only corporate library provider in the country. And I'm like, yeah, that's because people don't want that. That's like not something to be proud of.

[Jane Marie]

Yeah, exactly. We want them to be public.

[Meredith Lynch]

Right. And what we see, and there's great documented research on this, is when library systems and services comes into a library, first of all, the employees of the library are no longer employees of the city or town, which means that they lose oftentimes benefits, pensions, et cetera, that they were. That they had. So it becomes a less desirable position for a lot of people. Right. And a lot of times people get let go and then have to reapply and become an employee of library systems and services. And so, you know, there's that whole Process.

[Jane Marie]

Wait, is Library Systems and Services a brand? Like, is that the company?

[Meredith Lynch]

Yeah, that's the company. And then they're owned by a private equity firm and that's a private company. That's a private company. And so what they will do is they'll come in and they will be in charge of like community programming. Like, libraries are so much more than books. They're also places where people might take an ESL class, they might work on a class towards a pathway to citizenship, et cetera. So they come in and I'm not saying that they necessarily get rid of all those classes, but they have a tendency to pull back on community programming. They have a tendency to pull back on providing books and resources that are tailored to the community, and they instead focus on things like bestsellers, et cetera. So, like what we've seen is like in a community, for example, that typically has a bigger Latinx population, they're pulling back on books that are in Spanish. And what we just saw, and fingers crossed that it doesn't happen, it looks like it's not happening, is they really just tried to get into the Huntington beach library here in Southern California. So thankfully there was a lot of pushback on that. And what was interesting there is that library systems and services, I believe it was their VP of sales who was really pushing to outsource to them under the guise of. This will end up saving you money. Is the former mayor of Huntington Beach.

[Jane Marie]

Okay, cool. California. So is private equity in multi level marketing?

[Meredith Lynch]

Wow, that's such a good question.

[Jane Marie]

That was pretty fun.

[Meredith Lynch]

I don't know.

[Jane Marie]

We got to look.

[Meredith Lynch]

Yeah, Recently. I'll just add that it recently entered the NFL. What? Yes. So private equity is actually in all of the major league sports.

[Jane Marie]

How do you gut the NFL? Like, how do you ransack the NFL?

[Meredith Lynch]

It's called CTEs, Jane Marie.

[Jane Marie]

Oh, we're doing an episode on that. The American Dream. Just getting knocked in the head a bunch.

[Meredith Lynch]

Yeah. And who gets knocked in the head? More black players, right?

[Jane Marie]

Totally.

[Meredith Lynch]

So basically what's so interesting about private equity in the NFL is this happened recently. It was voted on, I believe, in the late summer to allow private equity to invest in, in the league. And there were, I believe, 32 owners who are eligible to vote on this. Of the 32, only one of them voted against it. And that's why I'm now a Cincinnati.

[Jane Marie]

Bengals fan, because they voted against it.

[Meredith Lynch]

Voted against it. Mike Brown is the owner of the Cincinnati Bank, Cincinnati Bengals. And his concern is safety. It will.

[Jane Marie]

You can't Skimp on helmets.

[Meredith Lynch]

Well, yeah, actually, that is a very good point. His concern is that for, especially for the smaller marketed teams like a Cincinnati, that it's going to take money out of the community. But what's interesting about private equity in the NFL is that they've put a lot more guardrails on it. So it's limited on which private equity firms can invest, it's limited on how much ownership they can have, et cetera. So in a way, I am kind of wondering if this might end up being the model of how we can maybe have some small private equity investments if there are stricter guardrails on it.

[Jane Marie]

Right. But should we all understand, like, generally speaking, that private equity is not a good thing?

[Meredith Lynch]

Yes, but also, it's going to be really, really hard to completely eliminate it. So how can we find a way to make it restrained?

[Jane Marie]

By making rules? By not having it just be. Well, it's legal, so we can do whatever we want.

[Meredith Lynch]

Yes.

[Jane Marie]

What's going to happen? Like, is this becoming a bigger and bigger and bigger problem and we're all just going to have to live with it?

[Meredith Lynch]

Well, I think this is happening. I think that more people are talking about it, and I do think that it is part of the thing that is contributing to our wealth gap, which has been increasing over the years. I think it's stagnated a little bit. But I also think that with this incoming Trump administration, if we can put our eyes onto what he does to make it better for private equity, I think more people will have an awareness of it and understand it.

[Jane Marie]

Yeah. You've also uncovered a lot of celebrity connections, and I don't need you to get specific here, but tell me what happens when your hackles go up, when you hear like a celebrity announcement about some merger or some something. What's the first thing you do?

[Meredith Lynch]

Well, I mean, I'll just say this. Like, this is how I got radicalized. I saw that Kim Kardashian was starting.

[Thrive Market Ad]

A private equity firm.

[Jane Marie]

Oh, starting an ownership of one.

[Meredith Lynch]

Yeah. Kim has her own private equity.

[Jane Marie]

Scoundrel. She's a scoundrel. What's it called?

[Meredith Lynch]

It's called Sky Partners.

[Jane Marie]

Okay.

[Meredith Lynch]

And she actually started it with a gentleman by the name of Jay Sammons. He's from. Originally from the Carlisle Group. And Carlisle is really well known for driving nursing homes into the ground. That's kind of like their claim to fame. And with Jay Sammons, actually, he's really well known for the private equity involvement of the selling of the Taylor Swift Masters. Oh, so that Is her co founder.

[Jane Marie]

Yeah, but she hates Taylor Swift, right?

[Meredith Lynch]

Oh, totally. Here's the thing. Sometimes I wonder how much of that is mutually engineered. Yeah, there's definitely celebrity money in it. Tom Brady is involved in private equity. Now, the thing I find most interesting about that one is Tom Brady and Serena Williams both serve in the capacity of this private equity firm. The group is called Cancelo Group. They're headed by a gentleman by the name of Declan Kelly.

[Jane Marie]

Declan? Absolutely not. Thumbs down. No one. Nope. No Declan. Uh, that's like an evil person's name. Doesn't it sound like a Bond villain or something?

[Meredith Lynch]

What's interesting is Declan only had to start Cancelo Group because he had to leave his other job because he inappropriately touched employees at a nonprofit charity concert event. Of course, while incredibly drunk. And you know, one does. Yes, some might call it assault, but I believe he just copped to inappropriate touching, inappropriate behavior. So he had to step down. Then, like most white men, Declan just failed up and went and started a private equity firm that now also you'll find on the website. Tom Brady is on, as is Serena Williams, which I always find to be.

[Jane Marie]

So disappointing because her husband in that world as well.

[Meredith Lynch]

He is. But like, come on, Serena, like, you're a champion of women and so you go and join up with this guy who literally had to be let go for his behavior with women.

[Jane Marie]

Rich people want to stay rich, you know?

[Meredith Lynch]

Ain't that the truth?

[Jane Marie]

Is there like a type of person that gets into private equity? Is there like a stereotype of your average private equity bro?

[Meredith Lynch]

White.

[Jane Marie]

Uh huh. They have penises.

[Meredith Lynch]

Yep. They tend to be fiscally conservative, if that's still even a thing anymore. Private equity firms are often recruiting from the Ivy leagues. And here's the other thing. This is another area where I feel like I've become so radicalized. I don't blame someone for going and working in private equity as a junior staffer or an administrative assistant or it's the people at the very top. And also it's the people in Congress who are not putting guardrails on this. That's really. I look to.

[Jane Marie]

They're not mad at the 22 year old coming out of Harvard?

[Meredith Lynch]

No.

[Jane Marie]

Who wants to impress mommy and daddy with their first job at a private equity firm?

[Meredith Lynch]

I'm really not. Is that bad?

[Jane Marie]

No. Also, they don't even have a frontal lobe yet at 22. You know what I mean? It's totally. It's all a crapshoot. We don't know where any of our kids are gonna end up in their 20s. But, yeah, I think that the blame should be put squarely on the shoulders of the people like Kim Kardashian and Tom Brady who promote this sort of thing. What is the upside that they're trying to sell? Is it just totally a cash grab or do they think there's, like, some positive for society?

[Meredith Lynch]

Yeah, that's a good question. I mean, I think with Kim. I've always wondered if Kim wants to make some type of political run in the future. And in running a private equity firm, you could essentially cement yourself in business very successfully. Private equity is what Mitt Romney did. And so I do think it's that. I think it's the accumulation of wealth, of course. And I think it's also like more is. Is better. And, you know, rich people are so weird.

[Jane Marie]

Like, when Elon is bragging about how much money he has, Is he in private equity, by the way? Elon Musk.

[Meredith Lynch]

Oh, that's such a good question. I can't believe I don't know that.

[Jane Marie]

I'm just giving you assignments. That's what this interview is. No, you're gonna be a regular correspondent on the show, and you're gonna come back and answer all these questions for me. I wanna hear if Elon Musk is in. But like, him bragging about being the richest person on earth, it's like, I see the tented fingers of Mr. Burns whenever he says something like that. I'm like, that's a bad guy.

[Meredith Lynch]

It's embarrassing. It's embarrassing.

[Jane Marie]

Thanks, Meredith.

[Meredith Lynch]

Thank you. Bye.

[Jane Marie]

Thank you so much, Meredith. She can be found on TikTok at meredithmlinch. And don't forget, we have a tip line. Just call us at 818-584-1421. What looks like a pyramid scheme to you? We want to hear.

[Warby Parker Ad]

If you wear glasses. You know how hard it is to find the perfect pair. But step into a Warby Parker store and you'll see it doesn't have to be. Not only will you find a great selection of frames, you'll also meet helpful advisors and friendly optometrists. Yep, many Warby Parker locations also offer eye exams. So the next time you need glasses, sunglasses, contact lenses, or a new prescription, you know where to look. To find a Warby Parker store near you or to book an eye exam, head over to warbyparker.com retail.

[Meredith Lynch]

It's Holy Week in Jerusalem. The people want revolution. Their leaders want an execution. The world, world will never be the same. Coming soon to theaters the chosen last supper. Get your tickets now.

[Aura Ad]

This podcast is brought to you by Aura. Imagine waking up to find your bank account drained, bills for loans you never took out, a warrant for your arrest, all because someone stole your identity. Hackers aren't waiting. Why are you? That's why we're thrilled to partner with Aura. Your personal data is a gold mine for hackers, and Aura helps lock it down. Aura monitors the dark web, blocks data brokers from selling your information, includes a VPN for private browsing and a password manager to secure your accounts before criminals break in. For a limited time, Aura is offering our listeners a 14 day free trial plus a dark web scan to check if your personal information has been leaked. All for [e-mail] safety that's aura.com safety to sign up and start protecting yourself and your loved ones, that's aura.com safety terms apply. Check the site for details.