• AmbitiousProcess (they/them)@piefed.socialEnglish
    29·
    4 days ago

    To be fair to the massive multibillion dollar megacorporation…

    It’s a private credit fund, where you invest money specifically to loan it to corporations at high interest rates, hoping they’ll pay it back, while a lot will just kind of go defunct. Loan sharking for corporations as an investment asset. It’s meant to be semi-liquid, not like a regular bank.

    It’s often used for things like when a private equity fund wants to do a leveraged buyout of a company, where the company gets saddled with a ton of debt in exchange for the investors getting to milk it dry. Including companies I know you’ve heard of like Red Lobster, Toys R Us, Joann Fabrics, and a lot more.

    Again, loan sharking, but for corporations. Can’t exclude them from exploitative financial mechanisms!

    • humble_boatsman@sh.itjust.worksEnglish
      7·
      3 days ago

      Yeah this is also not happening to “retail” investors as some writes up have chosen to use the term. These are funds exclusive to high net worth buy ins. So fuck these gamblers not able to access their petty cash funds.