Private Equity Briefcase

July 16, 2008

A More Perfect Union

“The buyout industry would like to portray themselves as knights on white horses coming to the rescue,” says a Service Employees International Union spokesman.

It’s a remark that refers to the buyout community’s efforts to ease bank investment regulations (SEIU president Andy Stern addressed the matter separately in a Wall Street Journal editorial on July 7).

The SEIU spokesman’s quote comes a few days after IDD posted a blog about the international labor union’s six-continent private equity demonstration scheduled for Thursday in 25 countries. At the time of the posting the magazine hadn’t heard back from the union as to why the protest effort was planned or gotten a chance to address whether the SEIU’s take on private equity was one-sided as the posting insinuated.

On Tuesday, IDD spoke to a press representative for the two million member labor organization. “We’re going to be very pointed in pointing out problems,” the SEIU rep said. “They’ve [private equity firms] been doing business as usual for a very long time without anyone raising questions.”

It is a point worth considering. One wonders, though, whether the union has spoken with any family business owners who’ve sold companies to private equity firms—company sellers are notorious for asking questions. Of course, it’s obvious those aren’t the folks the union has in mind. But, that begs another question: why not?

It’s also worth noting that a recent study by Ernst & Young found that private equity-backed companies fared better than their publicly traded counterparts. But, corporate growth doesn’t seem to be a subject the union or other private equity activists seem to care much about.

Leave that to the Association for Corporate Growth.

IDD, it should be pointed out, did not address the issue of improved corporate performance of private equity-backed companies with the SEIU representative. It did learn from the spokesman, though, that the buyout industry is behind “systematic practices that really are worsening some of the conditions in the economy right now.”

With sentiments like those it’s no wonder that many buyout investment groups use public relations firms.

Considering that protests against the buyout business only seem to be increasing on a global scale, perhaps it’s time the deep-pocketed private equity industry put out some counter spin of its own.