Verdicts
Scoring Methodology
How The Greenhouse and The Mixed Ledger verdicts are assigned — the four-pillar rubric, what each score means, and why financial returns alone are not enough.
What This Rubric Is
Most PE industry reporting scores deals on one dimension: financial return to investors. We score deals on four dimensions simultaneously. A deal that returned 5× to LPs while generating documented patient deaths does not score the same as one that returned 3× while doubling the workforce. The difference matters, and we try to measure it honestly.
This rubric is deliberately demanding. The Greenhouse is not a celebration of PE. It is a narrow category for deals that clear a high bar on all four pillars. Most deals will not qualify. The expected ratio across the full database is something like 38 Graveyard / 3–8 Greenhouse / 10–20 Mixed Ledger. That scarcity is intentional.
The Four Pillars
Pillar 1
Customer Outcome
Did the product or service measurably improve under PE ownership?
PE firms frequently justify acquisitions by claiming they will improve operations and customer experience. This pillar holds that claim to evidence. Relevant metrics include: product quality data, customer satisfaction scores (J.D. Power, ACSI, etc.), access expansion (new locations, lower prices, broader availability), and the absence of quality-decline documentation. Price decreases that come at the cost of safety or staffing do not count as customer improvements.
Pillar 2
Worker Outcome
Were workers materially better off — or at least not worse off — under PE ownership?
Employment growth, wage growth relative to industry benchmarks, working-condition improvements, and the absence of mass layoffs as a deliberate value-creation lever. Negative signals: documented speedups (more units of work per hour), wage stagnation below inflation, union disputes over working conditions, wage-theft settlements, or labor practices that triggered AG or DOL action. Absence of public data is marked Unknown rather than assumed positive.
Pillar 3
Operational Integrity
Did the company avoid the extraction playbook during the hold period?
The extraction playbook has a documented pattern: load the company with debt, pay a dividend recapitalization to return capital to LPs before exit, sell real estate via sale-leaseback to fund distributions, defer capital expenditures, and exit before the consequences arrive on the balance sheet. Any of these — if documented — produces a Weak or Mixed score on this pillar regardless of financial return. No dividend recap is table stakes; it should be the norm, not a positive differentiator. But in practice it often isn't.
Pillar 4
Durable Post-Exit Health
Five or more years after PE exit, is the company still healthy across all four dimensions — not just financially?
This pillar exists because PE deals are often structured to look successful at exit even when the seeds of failure have been planted. A company that IPO'd successfully but collapsed three years later under the debt load does not qualify for the Greenhouse. A company that is financially healthy post-exit but faces ongoing AG lawsuits over patient care belongs on the Mixed Ledger. The test is: would you be comfortable calling this a success in 2030, not just 2015?
Score Definitions
Clear, documented evidence of a positive outcome on this pillar. Multiple independent sources. The claim would survive skeptical scrutiny.
Evidence points in both directions, or positive evidence is real but carries meaningful caveats. A company that grew its workforce but also executed a significant dividend recap scores Mixed on operational integrity, not Strong.
Clear, documented evidence of harm or extraction on this pillar. Government filings, court records, and independent journalism are weighted more heavily than industry-self-reported data or advocacy-commissioned analyses.
Evidence on this pillar is genuinely thin, inaccessible, or only available from sources with an obvious advocacy interest and no independent corroboration. An honest Unknown is better than a fabricated positive. Unknown does not disqualify a deal from the Greenhouse; Weak does.
Qualification Rules
Greenhouse
Must score Strong or Mixed on all four pillars, with at least three Strong scores. Any Weak score disqualifies, regardless of how positive the other pillars are. Unknown scores are permitted but do not count toward the three-Strong threshold.
Mixed Ledger
Any deal with a meaningful split — Strong on financials and durability but Weak on workers or operational integrity, for example. This is the default home for deals where the story is genuinely complicated: where real value was created on some dimensions and real harm occurred on others, and where reasonable people with the same facts reach different conclusions.
Graveyard
Companies that ceased operating, filed for bankruptcy, or were liquidated under PE ownership or directly as a consequence of PE-loaded debt. See the full Graveyard →
Financial Returns Alone Do Not Qualify
A deal that returned 10× to LPs while understaffing hospitals, loading the company with debt to fund a special distribution, and triggering an AG investigation does not qualify for the Greenhouse. This is not an ideological position — it is the logical consequence of having four pillars instead of one. Financial return is captured indirectly in the Durability pillar (companies that extracted and collapsed will not score Strong on durability), but it is not a pillar of its own. The omission is deliberate.
How We Handle Unknown Scores
Much PE-era data is not publicly available. Wage records, turnover statistics, capex-per-year breakdowns for the private period, and compensation benchmarks frequently do not appear in SEC filings, press releases, or investigative journalism. When this is the case, we mark the pillar Unknown rather than inferring a positive from the absence of negative coverage.
Unknown is a genuine epistemic state, not a hedge. If a pillar is marked Unknown, the honest reading is: we could not find enough reliable evidence to score it positively or negatively. Anyone claiming to know the answer on an Unknown pillar is either working from sources we haven't seen (in which case, please submit them) or is guessing.
Source Hierarchy
Not all sources carry equal weight. We apply the following hierarchy:
- 1.Government filings — AG complaints, DOJ settlements, FTC reports, SEC filings, court records. These are primary sources with legal accountability.
- 2.Peer-reviewed academic research — NBER working papers, journal articles with methodology sections and conflict-of-interest disclosures.
- 3.Independent investigative journalism — NYT, STAT News, KFF Health News, WSWS, Bloomberg. Quality varies; we cite specific articles, not outlets generally.
- 4.Advocacy-commissioned analyses — SEIU reports, PE Stakeholder Project reports, industry association white papers. Real data, but with a stated position. We cite these with explicit attribution and do not present advocacy findings as independent audits.
- 5.Company-issued materials — Annual reports, press releases, investor day presentations. Useful for financial data; not treated as evidence on worker or patient outcomes.