The Reserve Bank is “watching” the expansion of private equity in Aotearoa New Zealand in light of alarm bells being run by financial regulators globally.
These alarm bells included no less than the European Central Bank and Bank of England over possible risks to financial stability by the rise of private equity, including their lending practices.

Reserve Bank watching economic risk of private equity growth in New Zealand
This is the subject of a Newsroom article by its business reporter Andrew Bevin (6 November; unfortunately link presently not accessible).
The context is the combination of tightening banking regulation following economic recession and a trend away from stock market listings.
This is leading to non-bank lending and private equity playing an increasingly important part in the financial systems of capitalist economies.
At this stage financial stability risks from private equity funds are considered by the Reserve Bank to be “limited” although they “…pull back their supply of financing or be unable to repay bank loans if economic conditions became stressed.”

BlackRock a lightning rod for private equity risk concerns in New Zealand economy
Although 2023 was a “relatively quiet year for private equity activity in New Zealand, Bevin noted that private investment fund BlackRock had opening an office in Auckland.
SolarZero eye-opener
BlackRock is a global investment management firm whose activities include private equity. Recently it has become a lightning rod for concerns over the economic risks of private equity funds in New Zealand.
BlackRock owned GRP111 is the major investor in SolarZero which has just been placed into liquidation because of what it called “unsustainable operating losses and liquidity constraints”.

SolarZero workers now out of pocket
This was the subject of an extensive Radio New Zealand Nine to Noon interview with Cecelia Tarrant, Chair of the crown-owned Green Investment Fund, another SolarZero investor (6 December):
Tarrant described the frustration and surprise of this sudden withdrawal. The liquidation has left around 15,000 customers in limbo. Other casualties are hundreds of employees out of pockets and contractors deprived of certainty.
Destruction and plunder
After listening to the Tarrant interview I was reminded of a revealing paywalled article by American historian Professor Kim Phillips-Fein (Columbia University) in the New York Review of Books (19 October 2023):
https://www.nybooks.com/articles/2023/10/19/conspicuous-destruction-plunder-brendan-ballou/.

Professor Phillips-Fein exposes the destruction and plunder of private equity capitalism
Her article reviews two new books on private equity. The first is Plunder by federal prosecutor Brendan Ballou. The second is These Are the Plunderers by journalist Gretchen Morgenson and researcher Joshua Rosner.
Professor Kim Phillips-Fein summarises them as together by asking the question:
What if private equity is not a perversion of capitalism (as the authors maintain), but merely a distillation of its contemporary values and practices? What if its leading financiers are an advance guard for our economic elite as a whole? Along with many other popular accounts of private equity, hedge funds, and high finance, the books imply that private equity primarily works by distorting and twisting economic norms. By looking closely, though, we also find the possibility of understanding the problems of today’s economic order.
A private equity fund is described in its most simple terms a pool of money managed by professionals to maximise returns for rich investors and with little regulation.
Their practice is to buy up all the shares of publicly traded companies thereby gaining complete managerial control.
Among her observations were:
- Eventually, after taking ownership, the private equity firm sells the company’s stock on the open market, in the hope of making profits that can be many times the initial investment.
- Today more businesses are owned by private equity firms than are listed on the New York Stock Exchange.
- Private equity firms create nothing and provide no meaningful services. Rather they actively undermine functional companies.
- Private equity seeks out low-wage industries in which the consumers are unlikely to complain. Many purchased companies purchased cater to the poor, sick, and vulnerable.
- While low wages, exploitation and the desire to escape regulation are also characteristics of capitalism generally, private equity firms add a new dimension. They remove companies from public view and scrutiny; from the “prying eyes of society.”
- As institutional investors, such as banks, have divested from fossil fuel companies, private equity firms have “swooped in to buy them” while also purchasing companies that specialise in disaster clean-up. This is “managing both to fuel climate change and to profit from its wreckage.”
Social protest movements
Phillips-Fein concludes by highlighting the need for what past social protest movements have done; challenge the elites of their day. She argues for the importance of this approach being applied to private equity firms which are elitist by their very nature.
In her words these past struggles “…all embodied “the principle that the economy must serve a wide range of needs, not just the self-satisfaction of an elite.”

United States focus relevant to New Zealand economy
I could not agree more. Professor Phillips-Fein’s focus is on the United States. But this raises questions about New Zealand as potential but realistic collateral damage. The collapse of SolarZero is an early alarm bell.
Private equity is not an aberration of capitalism. Instead it is a central part of capitalism’s changing face.
The role of social protest movements is critical if its plunder and destruction are to be prevented, both internationally and in Aotearoa.
Ian Powell was Executive Director of the Association of Salaried Medical Specialists, the professional union representing senior doctors and dentists in New Zealand, for over 30 years, until December 2019. He is now a health systems, labour market, and political commentator living in the small river estuary community of Otaihanga (the place by the tide). First published at Political Bytes
This has been a concern for a long while now .How many companies have been bought out only to be stripped of the major bits and then shut down .Nav man comes to mind .We often see a new fast growing company snapped up and it soon disappears off shore never to be seen again .Perhaps that is the cause of our much bleated about productivity not the lazy workers that get the blame .Clearly the profit takers are the only benefit of all the hard work of said lazy staff .
Under the CoC everything is up for sale
The problems with all of these large trans-nationals, large property investors, and private equity funds is that they are the epitome of the theft of the world’s wealth which has been designed with the advent of neoliberalism.
These institutions all get first dibs at new lending, which is the equivalent of the creation of money. This allows them to buy distressed assets in times of economic chaos (hence the continual boom bust cycles), hang on to them until the inevitable boom, flog them off to investors and reap the windfall profits just in time for the cycle to begin again.
They add no value whatsoever to society. Their success is based on the fact that the money supply grows exponentially, as do prices, asset values and inflation, while real wages decline (except for their enablers) and they are protected from society by the use of legal entities such as corporations, trusts and tax havens.
It only works because they are so highly leveraged and because the system relies on perpetual growth, so their wealth increases much faster than the decline in the value of money.
We all lose, except the bottom 99.9%, who never complain as long as someone else is worse off than they are, and can be blamed for societies shortcomings.
I wonder…can blackrock function if their offices are on fire? Do staff have flame retardant undies on? Do we, as an agrarian economy, literally and actually need blackrock? Is blackrock aka the Mafia? If it’s a private equity company setting up to literally steal our money can we resist? Should we resist? How do we resist? How does one get our hands around blackrocks throat? How does one make blackrock run while screaming?
One of the many things that worries me of an evening is that the more we point to any elephant in the room without shooting the fucker it eventually becomes a tedious nuisance and the less we can seem to do about it then we become unwittingly re-programmed to accept that it’s there shitting all over the sofa and eating all the shrubs so just ignore it and hope it’ll go away after it gets what it needs. @ Maori might get the metaphor. Private equity mafia are like cancer. They ARE cancer. They’re an organism that thrives on consuming everything until that thing dies, ( Tax break so ka ching! ) then it’s on to the next thing.
I’ve just watched this. It was chilling and grotesque.
Prime
Generation Wealth.
https://www.primevideo.com/detail/0SCA2IU0KVZ1ZMY470HF71PJOT/ref=atv_sr_fle_c_Tn74RA_1_1_1?sr=1-1&pageTypeIdSource=ASIN&pageTypeId=B081181FHT&qid=1733710460640
In our AO/NZ’s instance, what we have that’s so valuable in today’s modern world of impending annihilation is our entire country. There will be evil, hyper rich fuckers just out there who will be tirelessly working on how to get rid of us and install themselves.
Killer white T-Cell. “ How to get rid of us and install themselves” is working very nicely.
The meaning and the measurement of productivity continue to be beyond gw.
private equity destroys everything it touches…that’s it’s business model asset stripping
And the other side…..huge excess of govt employees at little to no discernable results/outcomes.
The total new employees in govt departments in last 6mths of Labour govt is not even the total of redundancies so far with govt workers, that shows you how much Labour stacked govt departments with excess staff, useless tax payers waste.
yawn – show us the size of the PSA in relation to the size of the population and the trends over the last 50 years that back up your nonsense or bugger off with your BS
The Reserve Bank rises – on the top floors?; so as to give a good view of the financial field and all the fast runners in the race. Or do they ever look or go outside their boxes or other edifices made of ticky-tacky?
A moment’s thought and one can see what the WTC impacts were about – the religious people in the Middle East wanted to hit out at the Great God Mammon that was largely a western intrusion. Can there ever be another Great Depression as in 1920’s? The world is bound to be a hot market with so many Mr and Ms Creosotes paying more for less – the law of supply and demand and competition to possess more shrinking resources etc. $28-$48 mill for the Red Shoes worn by Judy Garland for the film Wizard of Oz. There is too much money out there and ‘I want a Hippopotamus for Christmas, Only a Hippo will do’ reigns as the meme.
Maybe 2025 –
The Jubilee year is a biblical concept introduced in Leviticus* 25. Occurring every 50 years, it was a time of liberation and restoration, during which debts were forgiven, slaves were freed, and lands were returned to their original owners.
2025 Marks A Year of Jubilee and Debt Forgiveness
* https://simple.wikipedia.org/wiki/Book_of_Leviticus | …present form during the Persian empire (Yehud Madinata) between 538-332 BCE. Tradition says this book was written around 1300 B.C. by Moses.
(Good idea – time for resuming at this late stage??!)
and
Debt jubilee
https://en.wikipedia.org › wiki › Debt_jubilee
A debt jubilee is a clearance of debt from public records across a wide sector or a nation. Such a jubilee was proposed as a solution to debt incurred or …
and
The bible calls for a debt jubilee – forgiveness of all debts
Hacker News
https://news.ycombinator.com › item
At the end of every seven years you must cancel debts. This is how it is to be done: Every creditor shall cancel the loan he has made to his fellow Israelite.
(Do they still do this?)
Forgive Us Of Our Debts – Toward A Theodicy of Money …
Political Theology Network
https://politicaltheology.com › Category: Justice
22 Jun 2016 — The same goes for student debt situation, in which debts can be forgiven at the end of a term of 20 years of timely minimum payments (10 years …
and history – delving back anyway –
Proclaim debt amnesty throughout all the land? A biblical …
The Conversation
https://theconversation.com › proclaim-debt-amnesty-th…
26 Jul 2022 — A scholar of the ancient Near East explains how loan forgiveness was handled thousands of years ago in the Bible and royal decrees…
neo-feudalism – coming to a right wing peasant you know real soon – and they’ll still say it’s better as they lick-spittle their lord barons boots
When the previous Labour government did its secret deal with Blackrock, there were warnings of what this might mean for the electricity market in New Zealand (e.g. http://www.republican.co.nz 23 August 2023). Now we are seeing some of the consequences of Labour’s foolish and amoral approach to the domestic energy market highlighted by its relations with Blackrock. Of course the current coalition government is no better. It is persisting with Labour’s suicidal approach to the energy market and the economy in general. It is strange to watch the colonialist regime in the process of self-destruction, but also concerning in that many ordinary folk will suffer grievous harm as the structure disintegrates.
Michael Roberts recently had a good article on Private Equity firms on his blog: https://thenextrecession.wordpress.com/2024/11/19/private-equity-vampire-capital/
I wont pretend to know much about the workings of Private Equity businesses…but it seems to me to be not too different from that of the Mafia. Just legalised racketeering…