A New Name for Private Equity

Carlyle Group, , managing director and co-founder, David Rubenstein has suggested that the name Private Equity does not properly reflect, what companies referred to as Private Equity firms, actually do.

Breaking Views comes up with this suggestion:

...how about “fee-squared capital?” Private equity firms may make money for investors, but not before raking off plenty for themselves. Mr. Rubenstein, for
instance, was recently ranked No. 123 on the Forbes 400 list of richest Americans. Most money in private equity is made by charging annual management fees of 1.5 percent or so and then taking 20 percent of any profits. But private equity firms collect additional fees when they buy companies, while they own companies, and again when they sell companies — whether investors profit or not.