What I like most is that if you buy profitable companies, turn them into PFG’s, and against all research and your arguments, there is a zero COA, you’re still left with owning profitable companies. If that’s the downside, it’s somewhat absurd that there seems to be no philanthropist exploring this option to more efficiently multiply their giving.
Yeah, the downside would be the cost of running the program, which would be very small in relation to the value of the capital (which would be going to charity, so just subject to normal business risks).
If you see differences in post-acquisition performance, they can expand the fund and other philanthropists will have the incentive to copycat. If the thesis is generally proven, lenders will have the incentive to finance further acquisitions (leveraged buyouts); the sky, or most of the entire economy (other than perhaps startups where equity incentives might outweigh COA advantages), is the limit.
What I like most is that if you buy profitable companies, turn them into PFG’s, and against all research and your arguments, there is a zero COA, you’re still left with owning profitable companies. If that’s the downside, it’s somewhat absurd that there seems to be no philanthropist exploring this option to more efficiently multiply their giving.
Yeah, the downside would be the cost of running the program, which would be very small in relation to the value of the capital (which would be going to charity, so just subject to normal business risks).
If you see differences in post-acquisition performance, they can expand the fund and other philanthropists will have the incentive to copycat. If the thesis is generally proven, lenders will have the incentive to finance further acquisitions (leveraged buyouts); the sky, or most of the entire economy (other than perhaps startups where equity incentives might outweigh COA advantages), is the limit.
Truly absurd that this is not being explored.