Is Trying to Show That PE Creates Jobs a Wasted Effort?
With battles over taxes and registration still looming in Congress, and with pot shots still being flung at PE by journalists, union leaders and others, the Association For Corporate Growth has decided to show naysayers that buyout firms can be a source of job creation and economic good for the country. A waste of time? I’d argue it is. Most buyout firms are first and foremost about generating high returns for investors through the buying and selling of cash-flow-positive companies. (Imagine a GP in a road show pitch: “So Ms. LP, how about we skip over the investment multiple and net IRR and just get right to the jobs growth!”) Job creation is often the happy consequence of the LBO strategy; the times when it’s not will continue to provide fodder for industry critics.
