00:00 Speaker A
There was a story in the New York Times about cottage cheese. Um, and that cottage there’s a cottage cheese shortage because, you know, protein maxing is made and Tik Tok have made meant there’s high demand for it, but also El Caton, which is um a private equity firm that is associated with LVMH that has bought a lot of consumer brands, they apparently own good culture now. And so people are accusing them of being behind the the cottage cheese shortage. But
00:44 Speaker A
you know, it made me it made me speaking of the ’80s, it made me think a little bit about like the sort of big bad LBO era, right? you know, that um corporate raider kind of vibes, but I don’t know if that’s if public um sentiment has turned against PE in that way. I I think maybe probably only pockets of it.
01:13 Speaker B
I yeah, I think I should say by the way, like I read that story and my my takeaway was, well cottage cheese companies want to sell as much cottage cheese as possible. So they’re they’re not I don’t think cornering the cottage cheese market and and then like putting it in warehouses and waiting to sell it back to us.
01:27 Speaker A
Yeah. Yes, yes. It doesn’t seem like L Catterton is really There’s there wasn’t some like investigation that found the private equity has, you know, driven this shortage. It’s more perception.
01:37 Speaker B
Yes. I actually think it’s interesting. I think private equity will kind of always be sort of a villain, but I think the the shift in that business model from taking these big iconic companies private, the ones you’re talking about in the ’80s and ’90s and through through to the kind of mid 2000s for that last big public to private kind of era. Um, it is they don’t really do that anymore. I mean, occasionally, right? EA was obviously a big buyout, but like you don’t see that as much as you used to.
02:14 Speaker B
What you see now are a lot of like what they call platforms or roll-up strategies, which I think actually have their own very fair criticism, which is that a lot of those products get a lot worse when they get rolled up. So like optometrists, vet clinics, um, like these these laundromats, car washes. Um there is a sense that they’re going around kind of rolling up these mom and pop and selling us back a worse product at a higher price. That I think is like sort of an interesting criticism of PE these days and a somewhat fair one. Uh,
02:50 Speaker B
but yeah, I don’t know.
02:51 Speaker A
I mean, how cognizant are people in the industry, in the PE industry of those like, or I’m sure they’re cognizant, how much do they care?
03:00 Speaker B
I think they’re more worried about their reputation with their own investors, with their LPs who are for a bunch of reasons really mad at them these days.
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