PE report puts AIC on the front foot with new Congress

The industry body aims to show incoming members the benefits private equity can bring at local level.

Maloney: ‘constant challenge’ to educate members of Congress

The American Investment Council has produced a report for new members of Congress outlining private equity’s impact on their states and districts.

The report provides state-level jobs and investment data for the nine new senators and at district-level data for 40 new house members.

The AIC produces reports on a regular basis, but this is the first time the industry organisation is presenting new members with this information as soon as they take office.

The report is intended as “the initial education to the new members of Congress about how important private equity investment and job creation is in a district-by-district basis”, AIC president and chief executive Drew Maloney told Private Equity International.

While Congress members are generally familiar with the businesses in their districts, they are often unaware many of them are private equity backed, Maloney said.

According to the report, private equity has invested $3 trillion in US companies from 2012 to 2017, and private equity-backed companies employ 4.9 million people across the country. The industry has produced returns of 8.6 percent for pensions of public sector workers and retirees over the 10-year period to 30 June 2017.

Top of the senate list is incoming Republican Senator Rick Scott of Florida, where $29.88 billion was invested in 2017 alone. Private equity-backed companies employ more than one million people in the state.

He was followed by the Republican Senator Marsha Blackburn of Tennessee, where $21.53 billion was invested in 2017. Private equity-backed companies employ almost 168,500 people in the state.

The reported highlighted the top 40 new member districts for private equity jobs and investment. Topping the table for jobs numbers is Van Taylor, the Republican representative for Texas’ third congressional district, an area north of Dallas. Private equity-backed companies employ almost 86,000 in his district, and $3 billion was invested there in 2017.

Throughout the year the AIC brings members to private equity-backed portfolio companies inside their districts to make the industry’s investments more relatable.

It is a “constant challenge” to educate members of Congress about private equity, as the industry is “competing with every other organisation” that’s trying to get its message across, Maloney said. This is why the AIC has chosen to give new members just two numbers to focus on – investment and jobs – at the local level.

“We want to remind them we’re very engaged in their local communities and responsible for a significant amount of investment and a significant amount of job creation.”