Journalists, including this reporter, shared their perceptions of the private equity industry yesterday on a panel at the ACG Intergrowth conference in Orlando, Florida.
It was hopefully a useful exchange of views from people who write about private equity daily. But US general partners should not rely on the press – or anyone else – to tell their story for them, particularly if they think their industry is misunderstood and vilified.
Indeed, the need for the global buyout industry to better tell its own story and be less opaque is a theme Private Equity International has been banging on about for some time.
But US GPs in particular are missing a grand opportunity to demonstrate the industry is nuanced and segmented, to shout its successes, explain failures and frame related issues.
Sure, there are a few firms realising the merit of better communications – but they are the exception. To be frank, many private equity firms' communications strategies are muddled and, when they don’t communicate at all, self-defeating.
While other countries with much younger buyout industries, Brazil for example, have associations advocating for all forms of private equity and explaining its benefits, the US does not.
A first step was taken last year with the establishment of the Private Equity Council, but its mission is to lobby Washington on behalf of a dozen or so of the US' largest firms. They fail – and in fact refuse – to represent the vast majority of market participants.
What's needed is collective action, an organisation to which all US private equity firms can belong and pool resources.
Limited partners have managed to come together as the Institutional Limited Partners Association, as have US venture firms with the National Venture Capital Association. Why not buyout GPs in the US? Is the rationale that they are too busy doing deals and raising funds, or simply that buyout firms do best to remain private?
Either way, they are underestimating the power of having one voice, be it on Capitol Hill or in America's living rooms.
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