Private Equity and Competition: How Private Equity Drives Consolidation and Undermines Market Stability while Flying Under the Antitrust Enforcement Radar

Ruled by Reason

In this episode, AAI Vice President of Policy Laura Alexander and Patrick Woodall, Senior Researcher at Americans for Financial Reform, discuss the impact of private equity investment on competition, consumers, and communities. This discussion was inspired by a recent report on private equity from AAI and the Petris Center, Soaring Private Equity Investment in the Healthcare Sector: Consolidation Accelerated, Competition Undermined, and Patients at Risk. Beginning with the unique structure and financial incentives of private equity funds, and the resulting investment strategies, the discussion quickly turns to the consequences of those investment strategies. Laura and Patrick discuss how private equity funds avoid antitrust scrutiny by using “buy-and-build” and “roll-up” strategies, and why existing antitrust law is insufficient to address many of the anticompetitive effects of private equity investment. The episode concludes with a discussion of potential legislative and policy changes that could be used to curb private equity abuses.