The U.S. Department of Justice investigation of several high-profile buyout firms into possible collusion has reminded the industry that it does not have its own lobbying group. But that will soon change.
Those firms have hired veteran lobbyist and investment banker Harry Clark, managing partner of Greenwich, Conn.-based Stanwich Group, to represent the council. Clark declined to discuss the group, saying it is still in its formative stage. He said the group may be able to comment on its existence towards the end of November.
“They’ve been busy beavers behind closed doors,” says a spokesman for a firm that has been active in putting the Private Equity Council together. He added that the effort would likely not officially launch until early next year.
“There are trade organizations for the decorative goldfish growers and the egg producers and every business you can think of large and small,” says Michael Harrell, a partner at Debevoise & Plimpton who is co-chair of the firm’s Private Equity Funds Group. “And yet you have a large industry that doesn’t have a voice.”
“The NVCA has done a very good job with education and a good job of lobbying,” says Clint Harris, managing general partner with
Harrell says that part of the reason an industry advocacy group more geared towards buyout firms has been slow to come into being is because they are extremely competitive and often have very different investment philosophies. “Not withstanding what the DOJ investigation suggests, this is a fiercely competitive business,” he says. “So perhaps there was some reluctance for people to band together and adopt a common point of view. Maybe they didn’t have a common point of view.”
Harrell says that overall the private equity industry has not been the subject of excessive government scrutiny, but that the scrutiny that buyout deals have received and the rapid growth of the business over the last decade has created a need for public advocacy. Still, he says, the industry maintains a good reputation with the public. “There haven’t been the kinds of scandals we’ve seen in the hedge fund industry,” says Harrell. “This really is a straight-shooting group of people.”—M.S.