Thoughts on Private Equity

I just got around to reading this weeks cover story in Barron's and this quote stuck out:

"Private-equity firms say they have staying power because many LBOs got both generous financing with no immediate debt maturities and liberal bank loans that creditors rarely call in"

So, this is why Schwarzman and Co. think that their business model is sustainable. That would be HILARIOUS if the heads of Blackstone Group and Apollo Management didn't actually believe it.

Where is the part about creating value? The part about investing in companies that have the potential to revolutionize broken industries. These firms have failed us, and it is only a matter of time before creditors do call in these liberal loan agreements. What then? Then, the true innovators can get down to business.