PE and union reps spar at conference

The head of one of America’s most powerful unions weathered a counter-attack from Bear Stearns Merchant Banking’s COO during a panel discussion on private equity’s social impact.

A Bear Stearns Merchant Banking executive loudly criticized the Service Employees International Union (SEIU) president Andy Stern for waging what she characterized as an ill-defined war against the private equity asset class at recent conference in New York.

Gwyneth Ketterer, the chief operating officer of New York-based Bearn Stearns Merchant Banking Partners, and Stern appeared together on a fireworks-filled panel titled “Pushback — Private Equity’s Social Impact” at the 14th Annual Columbia Business School Private Equity and Venture Capital Conference on 15 February. 

Andy Stern and the SEIU have become well known for their protest tactics against the private equity industry, most recently by storming a conference appearance of The Carlyle Group’s co-founder David Rubenstein.

Andy Stern

At the Columbia event, Stern accused private equity for failing to adequately address the issues of worker wages, employment levels, healthcare and taxes.

In a series of heated rebuttals, Ketterer noted private equity’s goal of growing and improving companies, ultimately creating jobs and a more competitive landscape. Ketterer said that defined benefit pension plans are heavily invested in private equity, with many plans serving as founding investors in private equity firms. She criticised Stern for the SEIU’s relentless campaign against the private equity industry, which she argued flew in the face of union members continuing to benefit from returns generated by the asset class.

Stern said private equity should be more active in correcting a range of social inequalities, such as by working to increase the US minimum wage and rectify the lack of health insurance among many employees.  He also voiced repeatedly that he wants to see private equity pay “the same taxes as their secretaries” – a reference to the tax treatment of carried interest as a capital gain.

On several occasions, Ketterer was adamant that Stern provide specifics on what he would like the buyout industry to do in order to improve labor relations. Stern did not elaborate on how private equity should address the issues of interest to the SEIU, but reiterated that the industry should “speak out” on behalf of workers.