Hasse
Strategic Concepts & Mechanics
Primary Evidence
"Hasse says that all the profits in the company where he works go to pay fees and interest to the banks and the “management company,” the holding company controlled by the private equity firm’s representatives. He thinks it is demoralizing."
"One of the first private equity firms, Priveq’s founder Christer Dahlström, has an attitude toward debt that is similar to Hasse’s. Dahlström has never worked with really high leverage and is doubtful about it. – It is unfortunate for an acquired company to be sitting with large debts to the owners. There is also a risk that the CEO focuses too much on short-term cash flow and too little on long-term investments. But it yields lower returns with lower leverage, he says."
"Debt interest arises because the owners create a structure where all the costs of a company purchase as well as the loans are transferred to the acquired company. Hasse takes as an example a purchase with a loan of five billion kronor. For simplicity’s sake, let’s say it’s financed by a single bank, in reality it is usually several types of credits."
"Debt interest arises because the owners create a structure where all the costs of a company purchase as well as the loans are transferred to the acquired company. Hasse takes as an example a purchase with a loan of five billion kronor. For simplicity’s sake, let’s say it’s financed by a single bank, in reality it is usually several types of credits."