Part 1: When You Dial 911 and Wall Street Answers

“The business of driving ambulances and operating fire brigades represents just one facet of a profound shift on Wall Street and Main Street alike, a New York Times investigation has found. Since the 2008 financial crisis, private equity firms, the “corporate raiders” of an earlier era, have increasingly taken over a wide array of civic and financial services that are central to American life. Today, people interact with private equity when they dial 911, pay their mortgage, play a round of golf or turn on the kitchen tap for a glass of water. Private equity put a unique stamp on these businesses. Unlike other for-profit companies, which often have years of experience making a product or offering a service, private equity is primarily skilled in making money. And in many of these businesses, The Times found, private equity firms applied a sophisticated moneymaking playbook: a mix of cost cuts, price increases, lobbying and litigation.”

Part 2: How Housing’s New Players Spiraled Into Banks’ Old Mistakes

“When the housing crisis sent the American economy to the brink of disaster in 2008, millions of people lost their homes. The banking system had failed homeowners and their families. New investors soon swept in — mainly private equity firms — promising to do better. But some of these new investors are repeating the mistakes that banks committed throughout the housing crisis, an investigation by The New York Times has found. They are quickly foreclosing on homeowners. They are losing families’ mortgage paperwork, much as the banks did. And many of these practices were enabled by the federal government, which sold tens of thousands of discounted mortgages to private equity investors, while making few demands on how they treated struggling homeowners. The rising importance of private equity in the housing market is one of the most consequential transformations of the post-crisis American financial landscape. A home, after all, is the single largest investment most families will ever make.”

Part 3: How Private Equity Found Power and Profit in State Capitols

“Yet even as private equity wields such influence in the halls of state capitols and in Washington, it faces little public awareness of its government activities, The Times found. Private equity firms often don’t directly engage with legislators and regulators — the companies they control do. As a result, the firms themselves have emerged as relatively anonymous conglomerates that exert power behind the scenes in their dealings with governments. And because private equity’s interests are so diverse, the industry interacts with governments not only through lobbying, but also as contractors and partners on public projects.”

Part 4: How the Twinkie Made the Superrich Even Richer

“Across the nation in the summer of 2013, there was a feeding frenzy for Twinkies. The iconic snack cake returned to shelves just months after Hostess had shuttered its bakeries and laid off thousands of workers. The return was billed on “Today” as “the sweetest comeback in the history of ever.” Nowhere was it sweeter, perhaps, than at the investment firms Apollo Global Management and Metropoulos & Company, which spent $186 million in cash to buy some of Hostess’s snack cake bakeries and brands in early 2013. Less than four years later, they sold the company in a deal that valued Hostess at $2.3 billion. Apollo and Metropoulos have now reaped a return totaling 13 times their original cash investment. Behind the financial maneuvering at Hostess, an investigation by The New York Times found a blueprint for how private equity executives like those at Apollo have amassed some of the greatest fortunes of the modern era.”  [via Fizz]