The private equity industry has an image crisis and needs to do a better job of explaining the benefits it brings to the business world, a senior advisor with KKR said at a private equity conference last week.
“People have at best a neutral and at worst a negative impression of what we do,” said George Fisher, a senior advisor with US mega-firm Kohlberg Kravis Roberts. “We have a massive PR problem.
“We have to tell our story better. More often than not, we increase employment, not decrease. I don't think we've told our story adequately,” Fisher said.
Fisher, the former chairman and chief executive officer of Eastman Kodak and Motorola, said he was once suspicious of private equity when he was at the helm of public companies. His view has changed since KKR hired him in 2003 to help run portfolio companies, he said.
“I was a little fearful of joining, but it's been the best experience of my life,” Fisher said about KKR. “I learned a whole new dimension of business I never knew. What impressed me the most was the absolute and important set of values KKR espouses.”
Fisher, who spoke at Columbia Business School's Private Equity & Venture Capital conference in New York last week, said the US economy won't recover for at least two years.
“I think an unrealistic expectation is that the economy will somehow get through this year and be great next year,” Fisher said. “I'd bet on a couple years of tough economic times. In three to five years, life's going to be great, the system will be cleansed.”
The $800 billion economic stimulus plan moving through Congress could “sow the seeds of the next wave of greed”, Fisher said. “It's inevitable there will be a next wave of greed, it's human nature. I hope we have five to 10 years between them, but I think it's more like five years.”
KKR has tradionally been quiet about its operations. Last year, the firm hired sevearl high-profile executives to run communications. KKR hired Peter McKillop as director of global communications in November. McKillop formerly was the senior vice president and heaed of corporate communications for Bank of America's consumer and small business banks.
Last April, the firm brought on Kenneth Mehlman, former chairman of the Republican National Committee from 2005 to 2007, and the manager of former President George W Bush's 2005 re-election campaign. Mehlman became managing director and head of global public affairs, a newly created position at the firm.
At the time, firm co-founder Henry Kravis said the firm was committed to explaining the benefits of private equity to the public. “We have been increasingly engaged with a wide range of consituents in recent years,” Kravis said in a statement.