If you want an easy explanation for how private equity works, watch Goodfellas. Martin Scorsese’s gangster movie has a famous scene in which a bunch of very clever, very mercenary criminals take over a restaurant called The Bamboo Lounge. The owner needs cash, so partners with the Mafia to keep it running.

Big mistake. He is about to experience what the mob call a “bust-out”. The crooks strip-mine the place for cash, booze, and anything that isn’t nailed down.

As one gangster explains: “Finally, when there’s nothing left, when you can’t borrow another dime from the bank or a penny from the suppliers, you bust the joint out. You take a match, and you blow the place.”

The Bamboo Lounge goes up in flames. And that is the end of that.

Metaphorically, our country is filled with the burned-out shells of scores of Bamboo Lounges: British companies bought by private equity (PE) firms, asset-stripped and discarded.

More burned-out shells are coming our way. American financiers plan to offload a series of flagship “British brands”, including Morrisons, PizzaExpress, Waterstones, Poundland and the gym chain Third Space.

I put the term “British brands” inside quotation marks because the statement simply isn’t true. They aren’t British brands. We think they are, but they are owned by American investment companies.

It is quite something that even Poundland isn’t British. We don’t even own our tackiest store.

Morrisons is owned by the US private equity firm Clayton, Dubilier & Rice. Poundland by the American investment firm Gordon Brothers. Waterstones by the New York hedge fund Elliott Investment Management. PizzaExpress is majority-owned by the US investment firms Bain Capital and Cyrus Capital Partners.

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