FORTUNE — Private equity has long fought against its reputation as a “greed is good” job-killer, arguing that it really is an economic growth engine that saves troubled companies and makes strong employers even stronger.
But it seems that the message can even be a hard sell even to some within private equity.
That’s the takeaway from “Derek Havens,” one of eight fresh-faced financiers shadowed for more than three years by journalist Kevin Roose, for his new book Young Money.
Havens, whose real name is not disclosed, is the son of a Wisconsin grocery store owner who in 2011 left a job at Wells Fargo in Chicago to join a New York private equity firm. Starting salary of $80,000 per year, with another $80,000 expected come bonus time. The “reputable” firm is not identified, except that it had around 50 employees and mostly engaged in leveraged buyouts. So likely a middle-market, generalist sort of firm.
In many ways, Havens seems to appreciate the work. Yes, he’s still spending unhealthy amounts of time building Excel spreadsheets, but he’s also going on due diligence trips where he “enjoyed rubbing shoulders with the blue-collar workers and the local executives, many of whom reminded him of his friends and family back home in Wisconsin.”
At the same time, however, Havens is extremely uncomfortable with what happens to many of these workers after his firm buys their company. In short, layoffs and overseas outsourcing.
Yes, his dad had laid off grocery store employees during lean years. And Havens’ boss compares private equity work to surgery, where sometimes amputation is required to save a life. The difference with private equity, however, was that firms often made money even if the patient/company ended up dying — thanks to such things as transaction fees and dividend recaps. Moreover, some of these tactics seemed to hasten a company’s demise and, with it, the livelihood of its workers.
Here is the key section, after Roose asks Havens if he felt “ethical” about working in private equity:
“Being ethical is kind of on a spectrum, right,” he said. “Like, I really like my firm, I really like the people I work with, and I think that within private equity, we do a good job of actually improving businesses rather than just going for quick money. But what conflicts me is that we don’t play by the same set of rules as everyone else. It’s a completely rigged system.”
I asked him what he meant.
“Well,” he said, “we buy these little companies, we put the best lawyers and consultants in the world on it, and if it goes bankrupt, we never lose. We put in stipulations that don’t leave us liable, there are seventeen blocker corporations between us and the company.” He paused, then chuckled. “How are you going to out-money private equity? Good luck.”
It is a rare public admission of doubt from a private equity executive, albeit one who does not have to publicly answer for his concerns. It is not, however, the confession of someone who decided to resolve his inner conflict by moving home to run the family business (as he apparently has eventual plans to do). In the book’s epilogue, Havens remains employed by the same private equity firm.
Note: Fortune will publish a full review of Young Money later this week.
