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{{Infobox Organization
{{Infobox Organization
|name = Private Equity Council
|name = Private Equity Growth Capital Council
|image = PE GC Council logo.png
|image = :PE GC Council logo.png
|image_border =
|image_border =
|size = 225px
|size = 225px
|formation = 2007
|formation = 2007
|extinction = (date of extinction, optional)
|extinction =
|type =
|type =
|status =
|status =
|purpose = Advocacy for [[private equity]] industry
|purpose = Advocacy, research and lobbying for [[private equity]] industry
|headquarters = [[Washington DC]], [[United States]]
|headquarters = [[Washington DC]], [[United States]]
|location =
|location =
|region_served =
|region_served =
|membership =
|membership =
|leader_title = President
|leader_title = President, CEO
|leader_name = Steve Judge<ref name="NJ Jan 12">{{cite news |title=Judge Named President and CEO of PEGCC |author=Andrew Joseph |url=http://influencealley.nationaljournal.com/2012/01/judge-named-president-and-ceo.php |work=Influence Alley |publisher=National Journal |date=30 January 2012 |accessdate=31 January 2012}}</ref>
|leader_name = [[Douglas Lowenstein]]<ref name=lowenstein>[http://www.nytimes.com/2006/12/29/business/29churn.html?scp=2&sq="private equity council"&st=nyt The Churn: People]. New York Times, December 29, 2006</ref>
|num_staff =
|num_staff =
|num_volunteers =
|num_volunteers =
|budget =
|budget =
|website = [http://www.pegcc.org/ www.pegcc.org/]
|website = [http://www.pegcc.org/ www.pegcc.org/]
|remarks =
|remarks =
}}
}}


The '''Private Equity Growth Capital Council''' (PEGCC), formerly the '''Private Equity Council''', is a [[lobby (politics)|lobbying]], advocacy and research organization for the [[private equity]] industry. The PEC was founded by a consortium of the largest private equity firms globally. The PEC focuses on promoting the private equity industry and on tax and regulatory legislation.
The '''Private Equity Growth Capital Council''' (PEGCC), formerly the '''Private Equity Council''' (PEC), is an advocacy, research and [[lobby (politics)|lobbying]] organization for the [[private equity]] and [[growth capital]] industry, based in [[Washington, D.C.]] The Council was launched by a consortium of private equity firms in February 2007, and focuses on educating lawmakers and the public about the private equity and growth capital investment industry. Its members include some of the largest private equity firms globally.


==Organization background==
Based in [[Washington, DC]], the Private Equity Council was founded in February 2007 to provide increased advocacy for an industry which had come under attack as it reached the peak of the [[private equity in the 21st century|mid-2000s buyout boom]]. Specifically, private equity firms and their owners were targeted by union groups, most notably the [[Service Employees International Union]] (SEIU), as well as by [[MoveOn.org]] and [[Amnesty International]].<ref>[http://www.nytimes.com/2008/06/04/business/worldbusiness/04union.html Union Takes Anti-Buyout Campaign Worldwide]. New York Times, June 4, 2008</ref>
===Founding and mission===
The concept for a [[trade association]] for the [[private equity]] industry originated in 2006, as the private equity market reached the peak of its [[private equity in the 21st century|mid-2000s buyout boom]] and it became the subject of increased criticism and government scrutiny.<ref name="Yerak Dec 06">{{cite news |url=http://articles.chicagotribune.com/2006-12-27/business/0612270420_1_private-equity-firms-private-equity-council-providence-equity-partners |title=Takeover firms form trade group: Private-equity council plans education push |last=Yerak |first=Becky |date=27 December 2006 |newspaper=Chicago Tribune |accessdate=13 December 2011}}</ref><ref name="Birnbaum Dec 06"/><ref>{{cite news |title=Can Private Equity Build a Public Face? last1=Duhigg |first1=Charles |url=http://www.nytimes.com/2006/12/24/business/yourmoney/24hedge.html |newspaper=The New York Times |date=24 December 2006 |accessdate=30 January 2012}}</ref> That year, [[private equity firms]] were involved in around 28 percent of acquisitions by dollar value, compared to three percent in 2001.<ref name="Birnbaum Dec 06">{{cite news |url=http://www.washingtonpost.com/wp-dyn/content/article/2006/12/26/AR2006122600864.html |title=Private Funds Prepare To Lobby: Equity Firms Merge To Fight Regulation |last=Birnbaum |first=Jeffrey |date=27 December 2006 |newspaper=The Washington Post |accessdate=13 December 2011}}</ref> In late 2006, the Private Equity Council (PEC) was formed as the industry's principal lobbying organization.<ref name="Nolan Dec 06">{{cite news |url=http://www.prweek.com/uk/news/607179/ |title=US PE firms ready first trade assoc |last=Nolan |first=Hamilton |date=1 December 2006 |work=PR Week |accessdate=13 December 2011}}</ref><ref name="MacFadyen Oct 06">{{cite news|url=http://goliath.ecnext.com/coms2/gi_0198-368050/PE-Trade-Group-Nearing-Launch.html |title=PE Trade Group Nearing Launch Amid Intensifying Scrutiny: The need for a private equity trade group was magnified when the Justice Department launched an informal probe into the industry |last=MacFadyen |first=Ken |date=30 October 2006 |work=Investment Dealers Digest |publisher=SourceMedia, Inc |accessdate=13 December 2011}}</ref><ref name=Bizjournal>{{cite news|url=http://www.bizjournals.com/sanjose/stories/2007/03/12/daily10.html |title=Private equity group says lawmakers misunderstand industry |date=12 March 2007 |work=Silicon Valley/ San Jose Business Journal |publisher=American City Business Journals, Inc. |accessdate=13 December 2011}}</ref> The trade association was officially launched in [[Washington, D.C.]] in February 2007.<ref>{{cite web |url=http://www.intelligenceonline.com/business-intelligence-and-lobbying/firms/2007/01/12/big-equity-fund-make-their-move,25547545-ART-REC |title=Big Equity Funds Make Their Move |date=12 January 2007 |work= Intelligence Online |publisher=Indigo Publications |accessdate=13 December 2011}}</ref>


[[:File:PE Council logo.png|thumb|right|125px|The original Private Equity Council logo in use from the formation of the organization through September 2010]]The Council aims to provide information and commission research on issues including the impact of private equity on job creation and pension funds<ref name="Fugazy Mar 07">{{cite news |url=http://www.allbusiness.com/government/elections-politics-lobbying/11931092-1.html |title=Private Equity Lobbying Group Gives the Market a Voice |last=Fugazy |first=Danielle |date=March 2007 |work=Mergers & Acquisitions |publisher=SourceMedia, Inc |accessdate=13 December 2011}}</ref><ref name="MacFadyen Oct 06"/> in order to educate business leaders, policymakers, the media, and labor organizations about the private equity industry.<ref name="PEI Feb 07">{{cite news |title=Your mission, should you decide to accept it |date=February 2007 |work=Private Equity International}}</ref> In addition to its research and communications endeavors, the Council's mission also includes [[Advocacy groups|advocacy]] on behalf of private equity firms and the growth capital investment industry.<ref name="Alder Dec 06">{{cite news |url=http://www.bizjournals.com/dallas/stories/2006/12/25/daily13.html |title=Texas Pacific, others form private equity trade association |last=Alder |first=Neil |date=27 December 2006 |work=Dallas Business Journal |publisher=American City Business Journals, Inc. |accessdate=13 December 2011}}</ref><ref>{{cite web |url=http://www.pegcc.org/about/ |title=About |work=PEGCC.org |publisher=Private Equity Growth Capital Council |accessdate=21 December 2011}}</ref>
[[Douglas Lowenstein]] was selected to be the president of PEC in December 2006.<ref name=lowenstein>[http://www.nytimes.com/2006/12/29/business/29churn.html?scp=2&sq="private equity council"&st=nyt The Churn: People]. New York Times, December 29, 2006</ref>


===Expansion and renaming===
In September 2010, the Private Equity Council changed its name to the Private Equity Growth Capital Council, with its expansion to thirty member firms.
In 2010, the PEC decided to expand its membership to include a broader selection of private equity industry stakeholders.<ref name="PEM Apr 10"/><ref name="PEI Sep 10">{{cite news |title=PEC adds 18 members, changes name |date=14 September 2010 |work=Private Equity International}}</ref> In September 2010, eighteen new members were added to the Private Equity Council, including a variety of middle market private equity firms and [[growth capital]] investment firms.<ref name="PEI Sep 10"/> Following this expansion the Council changed its name to the Private Equity Growth Capital Council (PEGCC) to reflect the wider membership.<ref name="Lattman Sep 10">{{cite news|url=http://dealbook.nytimes.com/2010/09/14/private-equitys-makeover-effort-starts-with-trade-group/|title=Private Equity’s Makeover Effort Starts With Trade Group|last=Lattman |first=Peter |date=14 September 2010 |work= Dealbook |publisher=The New York Times |accessdate=13 December 2011}}</ref> According to the PEGCC, in addition to the name change it created a committee called the "Growth Capital Committee" to focus specifically on issues related to middle and small market firms.<ref>{{cite web |url=http://www.pegcc.org/private-equity-council-adds-18-new-members-changes-name-to-private-equity-growth-capital-council/ |title=Private Equity Council adds 18 new members, changes name to Private Equity Growth Capital Council |date=14 September 2010 |work=PEGCC.org |publisher=Private Equity Growth Capital Council |accessdate=21 December 2011}}</ref>


==Member firms==
===Member firms===
The Council's members include some of the largest private equity firms globally,<ref name="PEM Apr 10">{{cite news |title=Should you join the PEC? |date=22 April 2010 |work=Private Equity Manager |publisher=Private Equity International}}</ref> including [[Blackstone Group]], [[Carlyle Group]], [[Kohlberg Kravis Roberts]] and [[TPG Capital]] (formerly [[Texas Pacific Group]]) who were also involved in its formation.<ref name="Yerak Dec 06"/> Other founding members included [[Apollo Global Management]], [[Bain Capital]], [[Hellman & Friedman]], [[Madison Dearborn Partners]], [[Silver Lake Partners]] and [[Thomas H. Lee Partners]].<ref>{{cite news |title=US lobbying association seeks more members |url=http://w3.nexis.com/new/docview/getDocForCuiReq?lni=52SC-5011-F16T-836V&csi=342670&oc=00240&perma=true |work=Private Equity International |date=19 April 2010 |accessdate=30 January 2012}}</ref>
[[File:PE Council logo.png|thumb|right|125px|The original Private Equity Council logo in use from the formation of the organization through September 2010]]
The Private Equity Council's charter members included 12 of the largest private equity firms, globally:
*[[Apax Partners]]
*[[Apollo Global Management]]
*[[Bain Capital]]
*[[Blackstone Group]]
*[[Carlyle Group]]
*[[Hellman & Friedman]]
*[[Kohlberg Kravis Roberts]]
*[[Madison Dearborn Partners]]
*[[Permira]]
*[[Providence Equity Partners]]
*[[Silver Lake Partners]]
*[[TPG Capital]] (formerly [[Texas Pacific Group]])


In September 2010, the Private Equity Council changed its name with the expansion to thirty members. Among the 18 new members were an assortment of middle market private equity firms and growth capital firms. The new membership included [[Avista Capital Partners]], [[Brockway Moran & Partners]], [[Crestview Partners]], [[Genstar Capital]], [[Global Environment Fund]], [[GTCR]], [[Kelso & Company]], [[KPS Capital Partners]], [[Levine Leichtman Capital Partners]], [[MidOcean Partners]], [[New Mountain Capital]], [[Riverside Company]], [[Sterling Partners]], [[Sun Capital Partners]], [[TA Associates]], [[Thomas H. Lee Partners]], [[Vector Capital]] and [[Welsh, Carson, Anderson & Stowe]].
{{As of|2012}}, member firms include [[American Securities]], [[Apax Partners]], [[ArcLight Capital Partners]], [[Brockway Moran & Partners]], [[CCMP Capital Advisors]], [[Crestview Partners]], [[Francisco Partners]], [[General Atlantic]], [[Genstar Capital]], [[Global Environment Fund]], [[GTCR]], [[Irving Place Capital]], [[The Jordan Company]], [[Kelso & Company]], [[KPS Capital Partners]], [[Levine Leichtman Capital Partners]], [[MidOcean Partners]], [[New Mountain Capital]], [[Permira]], [[Providence Equity Partners]], [[The Riverside Company]], [[Sterling Partners]], [[Sun Capital Partners]], [[TA Associates]], [[Thoma Bravo]], [[Vector Capital]], and [[Welsh, Carson, Anderson & Stowe]].<ref>{{cite web |url=http://www.pegcc.org/about/members/ |title=Members |date=2011 |work=pegcc.org |publisher=Private Equity Growth Capital Council |accessdate=30 January 2012}}</ref>

==Activities==
Since its launch in 2007, the PEGCC has commissioned research and been involved in outreach to policymakers and business leaders on a variety of issues related to the private equity industry.

In addition to its research and lobbying activities, the trade association has developed guidelines for best practices for its members and the wider private equity industry. In 2009, the Council developed a set of "guidelines for responsible investment", which were adopted by its members. The guidelines covered issues such as health, safety, labor, governance,<ref name="MacFadyen Feb 09">{{cite web |url=http://www.themiddlemarket.com/news/190071-1.html |title=PE Adopts Responsible Investment Guidelines |last=MacFadyen |first=Ken |date=16 February 2009 |work=Mergers & Acquisitions Report |publisher=SourceMedia, Inc. |accessdate=13 December 2011}}</ref> transparency for stakeholders and respect for human rights.<ref name="PEC Feb 10">{{cite web |url=http://www.unpri.org/files/PECPRfinal.pdf |title=Private Equity Council members adopt guidelines for responsible investment |date=10 February 2009 |work=Principles for Responsible Investment |publisher=Private Equity Council |format=pdf |accessdate=13 December 2011}}</ref> According to the Council, the guidelines were produced in accordance with the [[United Nations]]' [[Principles for Responsible Investment]] (PRI), from discussions between Council members and a group of institutional investors.<ref name="PEC Feb 10"/> The guidelines focus on transparency of private equity transactions and ensuring compliance with all applicable laws, both in the U.S. and overseas, and encourage adding value to members' [[Portfolio company|portfolio companies]].<ref name="PEC Feb 10"/><ref name="MacFadyen Feb 09"/> The Council received positive feedback on the guidelines from PRI executive director James Gifford, and the chief investment officers of both [[CalPERS|California Public Employees Retirement Systems]] (CalPERS)<ref name="PEC Feb 10"/> and [[CalSTRS|California State Teachers' Retirement System]] (CalSTRS), however, the [[Service Employees International Union]] remained critical of the industry arguing that outside regulation was needed rather than internal guidelines.<ref name="MacFadyen Feb 09"/>

===Studies and reports===
In early 2007 the private equity industry was criticized by the [[Service Employees International Union]] (SEIU), which argued that the industry put employees at risk of job loss and had a negative impact on job creation.<ref>{{cite news |title=Congress warns private equity over excess profits |last=Foley |first=Stephen |date=17 May 2007 |work=The Independent (London) |accessdate=December 2011}}</ref><ref>{{cite news |title=Union Takes Anti-Buyout Campaign Worldwide |author=Michael J. de la Merced |url=http://www.nytimes.com/2008/06/04/business/worldbusiness/04union.html |work=The New York Times |date=4 June 2008 |accessdate=13 December 2011}}</ref> In response to this criticism, the Council commissioned a number of studies and reports. In September 2007, a PEC report detailed three case studies of private equity owned companies that became more competitive and increased employment following their buy-out.<ref name="PEI Sep 07">{{cite news |title=PEC: buyouts better businesses |date=6 September 2007 |work= Private Equity International |publisher= Private Equity International}}</ref> The following January, a study for the Council by [[Robert J. Shapiro]] and economist Nam Pham found that 76 percent of companies owned by eight private equity firms reported an increase in jobs.<ref>{{cite news |title=Private equity transactions led to more jobs |first=Neil |last=Adler |url=http://www.bizjournals.com/sanjose/stories/2008/01/14/daily77.html |work=Silicon Valley / San Jose Business Journal |date=18 January 2008 |accessdate=22 December 2011}}</ref> The study observed "significantly greater job gains" in private equity transactions compared with the overall market.<ref name="PEI Jan 08">{{cite news |title=Study finds buyouts boost jobs |date=17 January 2008 |work= Private Equity International}}</ref> In 2010 a Council report found that [[Portfolio company|portfolio companies]] outperform publicly owned companies by seven percent over three years and 11 per cent over five years, countering claims that private equity has a negative impact operational improvement.<ref name=Hedgeweek>{{cite news |title=Private equity industry rejects criticism |date=29 July 2010 |work=Hedgeweek |publisher=GFM Ltd.}}</ref>

Other reports commissioned by the Council include a plan to improve the U.S. economy, produced by economists [[Martin Neil Baily]] and [[Matthew Slaughter]],<ref>{{cite web |url=http://dealbook.nytimes.com/2008/12/17/private-equity-councils-view-of-obamas-priorities/
|title=Private Equity Council’s View of Obama’s Priorities |last=Sanati |first=Cyrus |date=17 December 2008 |work=Dealbook |publisher=The New York Times Company |accessdate= 3 December 2011}}</ref> and a report estimating the total employment by private equity owned companies to be 11 million people. ''Pensions & Investments'' magazine stated that this was the first time that employment by the industry had been quantified.<ref>{{cite news |url=http://www.pionline.com/article/20100517/PRINTSUB/100519896/ |title=Council measures private equity's impact |last=Jacobius |first=Arleen |date=17 May 2010 |work=Pensions & Investments |publisher=Crain Communications Inc. |accessdate=13 December 2011}}</ref>

===Legislation and regulation===
The PEGCC has advocated before Congress in support of the private equity industry on numerous occasions. In 2009, the then-president of the PEC, Douglas Lowenstein, testified before the [[House Financial Services Committee]] (HFSC) in support of legislation requiring private equity and hedge funds to register with the [[Securities and Exchange Commission]] (SEC).<ref name="Phillips Nov 09">{{cite web |url=http://www.boston.com/news/local/massachusetts/articles/2009/11/16/pagliucas_campaign_stance_on_lobbyists_contrasts_with_bain_capitals_record/ |title=Pagliuca sees a role for lobbyists; Firm's record at odds with campaign stance |last=Phillips |first=Frank |date=16 November 2009 |newspaper=The Boston Globe |accessdate=13 December 2011}}</ref> He stated that the PEC supported registration of managers of private equity, venture capital, and hedge funds under the proposed [[Dodd–Frank Wall Street Reform and Consumer Protection Act|Private Fund Investment Advisers Registration Act]] because its members perceived the law as an important component of protection for investors against systemic risk.<ref>{{cite web|url=http://www.house.gov/apps/list/hearing/financialsvcs_dem/lowenstein_testimony.pdf |title=Testimony by Douglas Lowenstein, President, Private Equity Council |date=6 October 2009 |work=House Financial Services Committee Hearing |publisher=U.S. House of Representatives |format=pdf |accessdate=June 23, 2011}}</ref> Although the PEC supported registration, Lowenstein raised concerns regarding cost for smaller firms.<ref name="Schor Jul 09">{{cite news |url=http://www.infrastructureinvestor.com/Article.aspx?article=44521|title=Private Equity Council supports SEC registration rules|last=Schor |first=Elena |date=15 July 2009 |work=Infrastructure Investor |publisher=PEI Media Group Limited |accessdate=13 December 2011}}</ref>

The Council has also testified before Congress on the private equity industry's role in the economy. In 2007, Lowenstein testified before the HFSC on the impact of private equity on employment and companies.<ref>{{cite news |title=House names witnesses for PE hearing |url=http://www.privateequityasia.com/Article.aspx?article=25252 |work=Private Equity Asia |date=8 June 2007 |publisher=PEI Media Group Limited}}</ref> In 2009, the Council's chairman Mark Tresnowski testified before the [[United States Senate Committee on Banking, Housing, and Urban Affairs|Senate Banking Subcommittee]] on the potential role of private equity in the recovery of the U.S. economy.<ref name="Schor Jul 09"/>

The PEC's initial lobbying efforts were focused on opposing proposed legislation to increase taxation of private equity managers' fees.<ref>{{cite news |title=Of Private Equity, Politics and Income Taxes last1=Sorkin |first1=Andrew Ross |url=http://www.nytimes.com/2007/03/11/business/yourmoney/11deal.html |newspaper=The New York Times |date=11 March 2007 |accessdate=30 January 2012}}</ref><ref>{{cite news |title=Mr. Kravis Goes to Washington (Capra Rolls Over) last1=Labaton |first1=Stephen |last2=Anderson |first2=Jenny |url=http://www.nytimes.com/2007/07/11/business/11tax.html |newspaper=The New York Times |date=11 July 2007 |accessdate=30 January 2012}}</ref><ref name="Schor Apr 09">{{cite news |url=http://washingtonindependent.com/40579/private-equity-firms-lobby-less-as-industry-trade-group-takes-more-cash |title=Private Equity Firms Lobby Less, As Industry Trade Group Takes More Cash |last=Schor |first=Elena |date=27 April 2009 |newspaper=Washington Independent |accessdate= 13 December 2011}}</ref> The Council supported keeping the carried interest tax on managers fees at 15 percent,<ref name="Lattman Aug 11">{{cite news|url=http://dealbook.nytimes.com/2011/08/23/private-equitys-top-lobbyist-steps-down/ |title=Private Equity's Top Lobbyist Steps Down |last=Lattman |first=Peter |date=23 August 2011 |work=Dealbook |publisher=The New York Times |accessdate=13 December 2011}}</ref> rather than increasing it to the income tax rate.<ref name="Schor Apr 09"/> The proposed legislation was rejected but similar proposals to raise tax on carried interest were raised in 2009 and 2011, and the PEGCC continued to oppose them.<ref>{{cite news |title=Obama Proposes Tax on Bonds, Carried Interest for Wealthy |first1=Richard |last1=Rubin |first2=Steven |last2=Sloan |first3=Margaret |last3=Talev |url=http://www.businessweek.com/news/2011-09-13/obama-proposes-tax-on-bonds-carried-interest-for-wealthy.html |work=Bloomberg Businessweek |date=13 September 2011 |accessdate=23 December 2011}}</ref>


==References==
==References==
{{reflist|2}}
{{reflist|2}}
{{refbegin}}
*[http://www.nytimes.com/2006/12/24/business/yourmoney/24hedge.html Can Private Equity Build a Public Face?]. New York Times, December 24, 2006
*[http://www.nytimes.com/2007/07/11/business/11tax.html?scp=7&sq="private equity council"&st=nyt Mr. Kravis Goes to Washington (Capra Rolls Over)]. New York Times, July 11, 2007
*[http://www.nytimes.com/2007/03/11/business/yourmoney/11deal.html Of Private Equity, Politics and Income Taxes]. New York Times, March 11, 2007


{{refend}}
==External links==
==External links==
*[http://www.pegcc.org/ Private Equity Growth Capital Council] (organization website)
*[http://www.pegcc.org/ Private Equity Growth Capital Council website]
*[http://www.pegcc.org/about/members/ PEGCC membership]


{{US-org-stub}}
{{private equity firms}}
{{private equity firms}}
[[Category:Private equity]]
[[:Category:Private equity]]
[[Category:Lobbying organizations in the United States]]
[[:Category:Lobbying organizations in the United States]]
[[Category:Organizations established in 2007]]
[[:Category:Organizations established in 2007]]
[[:Category:Organizations based in the United States]]

Revision as of 13:13, 4 February 2012

Private Equity Growth Capital Council
Formation2007
PurposeAdvocacy, research and lobbying for private equity industry
HeadquartersWashington DC, United States
President, CEO
Steve Judge[1]
Websitewww.pegcc.org/

The Private Equity Growth Capital Council (PEGCC), formerly the Private Equity Council (PEC), is an advocacy, research and lobbying organization for the private equity and growth capital industry, based in Washington, D.C. The Council was launched by a consortium of private equity firms in February 2007, and focuses on educating lawmakers and the public about the private equity and growth capital investment industry. Its members include some of the largest private equity firms globally.

Organization background

Founding and mission

The concept for a trade association for the private equity industry originated in 2006, as the private equity market reached the peak of its mid-2000s buyout boom and it became the subject of increased criticism and government scrutiny.[2][3][4] That year, private equity firms were involved in around 28 percent of acquisitions by dollar value, compared to three percent in 2001.[3] In late 2006, the Private Equity Council (PEC) was formed as the industry's principal lobbying organization.[5][6][7] The trade association was officially launched in Washington, D.C. in February 2007.[8]

thumb|right|125px|The original Private Equity Council logo in use from the formation of the organization through September 2010The Council aims to provide information and commission research on issues including the impact of private equity on job creation and pension funds[9][6] in order to educate business leaders, policymakers, the media, and labor organizations about the private equity industry.[10] In addition to its research and communications endeavors, the Council's mission also includes advocacy on behalf of private equity firms and the growth capital investment industry.[11][12]

Expansion and renaming

In 2010, the PEC decided to expand its membership to include a broader selection of private equity industry stakeholders.[13][14] In September 2010, eighteen new members were added to the Private Equity Council, including a variety of middle market private equity firms and growth capital investment firms.[14] Following this expansion the Council changed its name to the Private Equity Growth Capital Council (PEGCC) to reflect the wider membership.[15] According to the PEGCC, in addition to the name change it created a committee called the "Growth Capital Committee" to focus specifically on issues related to middle and small market firms.[16]

Member firms

The Council's members include some of the largest private equity firms globally,[13] including Blackstone Group, Carlyle Group, Kohlberg Kravis Roberts and TPG Capital (formerly Texas Pacific Group) who were also involved in its formation.[2] Other founding members included Apollo Global Management, Bain Capital, Hellman & Friedman, Madison Dearborn Partners, Silver Lake Partners and Thomas H. Lee Partners.[17]

As of 2012, member firms include American Securities, Apax Partners, ArcLight Capital Partners, Brockway Moran & Partners, CCMP Capital Advisors, Crestview Partners, Francisco Partners, General Atlantic, Genstar Capital, Global Environment Fund, GTCR, Irving Place Capital, The Jordan Company, Kelso & Company, KPS Capital Partners, Levine Leichtman Capital Partners, MidOcean Partners, New Mountain Capital, Permira, Providence Equity Partners, The Riverside Company, Sterling Partners, Sun Capital Partners, TA Associates, Thoma Bravo, Vector Capital, and Welsh, Carson, Anderson & Stowe.[18]

Activities

Since its launch in 2007, the PEGCC has commissioned research and been involved in outreach to policymakers and business leaders on a variety of issues related to the private equity industry.

In addition to its research and lobbying activities, the trade association has developed guidelines for best practices for its members and the wider private equity industry. In 2009, the Council developed a set of "guidelines for responsible investment", which were adopted by its members. The guidelines covered issues such as health, safety, labor, governance,[19] transparency for stakeholders and respect for human rights.[20] According to the Council, the guidelines were produced in accordance with the United Nations' Principles for Responsible Investment (PRI), from discussions between Council members and a group of institutional investors.[20] The guidelines focus on transparency of private equity transactions and ensuring compliance with all applicable laws, both in the U.S. and overseas, and encourage adding value to members' portfolio companies.[20][19] The Council received positive feedback on the guidelines from PRI executive director James Gifford, and the chief investment officers of both California Public Employees Retirement Systems (CalPERS)[20] and California State Teachers' Retirement System (CalSTRS), however, the Service Employees International Union remained critical of the industry arguing that outside regulation was needed rather than internal guidelines.[19]

Studies and reports

In early 2007 the private equity industry was criticized by the Service Employees International Union (SEIU), which argued that the industry put employees at risk of job loss and had a negative impact on job creation.[21][22] In response to this criticism, the Council commissioned a number of studies and reports. In September 2007, a PEC report detailed three case studies of private equity owned companies that became more competitive and increased employment following their buy-out.[23] The following January, a study for the Council by Robert J. Shapiro and economist Nam Pham found that 76 percent of companies owned by eight private equity firms reported an increase in jobs.[24] The study observed "significantly greater job gains" in private equity transactions compared with the overall market.[25] In 2010 a Council report found that portfolio companies outperform publicly owned companies by seven percent over three years and 11 per cent over five years, countering claims that private equity has a negative impact operational improvement.[26]

Other reports commissioned by the Council include a plan to improve the U.S. economy, produced by economists Martin Neil Baily and Matthew Slaughter,[27] and a report estimating the total employment by private equity owned companies to be 11 million people. Pensions & Investments magazine stated that this was the first time that employment by the industry had been quantified.[28]

Legislation and regulation

The PEGCC has advocated before Congress in support of the private equity industry on numerous occasions. In 2009, the then-president of the PEC, Douglas Lowenstein, testified before the House Financial Services Committee (HFSC) in support of legislation requiring private equity and hedge funds to register with the Securities and Exchange Commission (SEC).[29] He stated that the PEC supported registration of managers of private equity, venture capital, and hedge funds under the proposed Private Fund Investment Advisers Registration Act because its members perceived the law as an important component of protection for investors against systemic risk.[30] Although the PEC supported registration, Lowenstein raised concerns regarding cost for smaller firms.[31]

The Council has also testified before Congress on the private equity industry's role in the economy. In 2007, Lowenstein testified before the HFSC on the impact of private equity on employment and companies.[32] In 2009, the Council's chairman Mark Tresnowski testified before the Senate Banking Subcommittee on the potential role of private equity in the recovery of the U.S. economy.[31]

The PEC's initial lobbying efforts were focused on opposing proposed legislation to increase taxation of private equity managers' fees.[33][34][35] The Council supported keeping the carried interest tax on managers fees at 15 percent,[36] rather than increasing it to the income tax rate.[35] The proposed legislation was rejected but similar proposals to raise tax on carried interest were raised in 2009 and 2011, and the PEGCC continued to oppose them.[37]

References

  1. ^ Andrew Joseph (30 January 2012). "Judge Named President and CEO of PEGCC". Influence Alley. National Journal. Retrieved 31 January 2012.
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  3. ^ a b Birnbaum, Jeffrey (27 December 2006). "Private Funds Prepare To Lobby: Equity Firms Merge To Fight Regulation". The Washington Post. Retrieved 13 December 2011.
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  18. ^ "Members". pegcc.org. Private Equity Growth Capital Council. 2011. Retrieved 30 January 2012.
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  21. ^ Foley, Stephen (17 May 2007). "Congress warns private equity over excess profits". The Independent (London). {{cite news}}: |access-date= requires |url= (help); Check date values in: |accessdate= (help)
  22. ^ Michael J. de la Merced (4 June 2008). "Union Takes Anti-Buyout Campaign Worldwide". The New York Times. Retrieved 13 December 2011.
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  27. ^ Sanati, Cyrus (17 December 2008). "Private Equity Council's View of Obama's Priorities". Dealbook. The New York Times Company. Retrieved 3 December 2011.
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  29. ^ Phillips, Frank (16 November 2009). "Pagliuca sees a role for lobbyists; Firm's record at odds with campaign stance". The Boston Globe. Retrieved 13 December 2011.
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  35. ^ a b Schor, Elena (27 April 2009). "Private Equity Firms Lobby Less, As Industry Trade Group Takes More Cash". Washington Independent. Retrieved 13 December 2011.
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  37. ^ Rubin, Richard; Sloan, Steven; Talev, Margaret (13 September 2011). "Obama Proposes Tax on Bonds, Carried Interest for Wealthy". Bloomberg Businessweek. Retrieved 23 December 2011.

Category:Private equity Category:Lobbying organizations in the United States Category:Organizations established in 2007 Category:Organizations based in the United States

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