In a dividend recap, a company takes on new debt and pays the money to its owner, usually a private equity fund.
What the film says
In private equity, a company can borrow money just to pay its owner. It's called a dividend recap. Say a fund owns a company. The company borrows a hundred million. Then it pays all of it to the fund. The fund has its cash, without selling anything. The company has a hundred million more debt. So why do investors care? Cash comes back early, which can lift returns. But the company now has to carry that debt. The fund gets paid. The company gets the bill.
In the glossary: Dividend recap
A simple example with round numbers, not advice. Terms vary by fund.
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