Private equity has an image problem with unions and employees of the big, public companies who say that PE destroys wealth by stripping out company assets and downsizing. One of my favourite PE people is David Rubenstein, head of one of the largest PE firms in the USA, Carlyle. He has a quiet sense of irony and self depreciating humour clearly evident as he he asked, "What, no demonstrators?" referring to the crowds following him around to public appearances. He gave a speech describing PE to the new President of the USA. Peter Lattman at the Wall Street Journal tells us about his 10 points to make to Barrack Obama next January, 2009.
Probably the big plus about PE is that, as David Rubenstein of Carlyle says, is that it is not your father's PE. In other words, that Gordon Gehko type barnstorming share holders' meetings and selling off the company assets is not today's PE fellow. Here's a taste of what the WSJ reports on David Rubenstein's speech:
No. 1: This is not your father’s private-equity industry. Rubenstein would remind the leader of the free world that the industry has grown tremendously and now is a vibrant part of the U.S. economy.
No. 2: Private equity is the principal source of high returns for pension funds. Don’t think about the Schwarzmans, Kravises and Rubensteins of the world when you think about making changes to the private-equity industry. Instead, think about the pension funds and the people with stakes in them.
Check out the article and read the blogs below to see just how misinformed smart WSJ readers can be.