This book aims to fill a gap in existing literature in order to contribute to the understanding of the main features and outcomes of the private equity business model that has already been spread around the world. Private equity funds have been drivers of the financialisation of the global economy. Lying at the juncture of the real economy and the shadow banking system, private equity funds draw upon capital and debt to acquire stakes in companies that are intended to be sold for profit after a number of years. Indeed, these institutional investors have a key role in the diversification of global investments. Although US private equity firms are still dominant, the global private equity industry has been mainly moving toward Europe and the Asia-Pacific region. The process of financialisation has contributed to unprecedented social, political, and environmental challenges. In this setting, the complexity of social and economic policy problems of the 21st century requires the recognition of the role of private equity globalization in the selection of investments and in the creation of new business structures. The shifts in corporate ownership, trough waves of mergers and acquisitions, have created new business structures where companies are considered bundles of assets and liabilities to be traded in order to get short-term returns. Indeed, new investment and portfolio management practices have been overwhelmed by the financialisation of wealth and "short-termism" in American and European business. While private equity investors aim to maximize their short-term returns, private equity funds turn to be major transnational employers. The outcomes of the global financial crisis of 2007-2008 made clear the need to redress and redesign business models and re-balance corporate power in order to broaden the dialogue on social responsibility. Maria Alejandra Madi's book aims to foster a deeper understanding of the ethical challenges related to the private equity financial engineering model. In short, the book aims to prepare the reader for participating in a fruitful debate. The main target is the transformation of the global economy to a more just and sustainable one. This book is recommended for a broad interdisciplinary audience. Not only students in economics, management and international business, but also policy makers, regulators, managers and investors. Reading this book will benefit all those who seek to better understand the complex stakes in the evolution of the capitalist system, in the tensions between short-term profit targets, regulatory policies, and participatory openings in governance and social inclusion.
Maria Alejandra Caporale Madi, Msc and PhD in Economics, Msc in Philosopy. She has made her career as an economist in macroeconomics, business sustainability and socio-economic development. Author and editor of papers, articles and books, including Global Finance and Development, The Greening of Global Finance and The Greening of Latin America. She is currently Director of the Ordem dos Economistas do Brasil, Counselor of the Conselho Regional dos Economistas do Brasil-SP, Assistant Editor of the International Journal of Pluralism and Economics Education and member of the Editorial Board of the International Journal of Green Economics. Among other activities, she is also editor of the World Economics Association (WEA) Pedagogy BLOG and Chair of the WEA On Line Conferences. Besides, her recent activities include training courses for Brazilian trade unions and distance learning projects. She is currently Visiting Professor at UNIFESP and Avocational lecturer at Steinbeis University Berlin. Former Visiting Professor at University of Manitoba (Canada) and University of Kassel (Germany). Former Professor at Global Labor University. Retired Professor at UNICAMP (State University of Campinas).
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