In an article on Current Media, Professor Karl Okamoto shared his expertise on private equity firms.
According to the article, Mitt Romney's experience as CEO of Bain Capital has placed private equity firms, firms that manage portfolios filled with privately owned companies, in the spotlight.
Okamoto, an expert in corporate, venture capital and private equity law discussed the pros and cons of private equity firms. Okamoto commented that private equity firms are effective when they "show up to kick the tires," monitor their investments and align their interests with the interests of the company in which they invest.
On the other side of the equation, unlike public companies that have shareholders to answer to, private companies "don't need to report their financial results," Okamoto added. Therefore, greedy private equity firms that care only about their own interests can agressively leverage a private company, pile on debt and steer it into bankruptcy without anyone to answer to, Okamoto concluded.
Okamoto is the director of the school's Entrepreneurial Law Program.