Finally, after months on the ropes, soaking up the body blows from the unions, the politicians and the tax man, the buyout industry came out fighting. This has made for scintillating reading.
One of our top stories in March, however, was a classic piece of industry in-fighting, proving that whatever else is going on, whatever external distractions come your way, it is still great fun trading blows with your rivals.
Stephen Schwarzman, chief executive of The Blackstone Group, showed just how much fun it is while sat on a conference stage next to Todd Fisher of Kohlberg Kravis Roberts and casting doubt on the viability of public markets as a fundraising option for private equity.
KKR, you will remember, raised $5 billion – $3.5 billion more than initially planned – by floating a listed vehicle on the Euronext Stock Exchange in Amsterdam last year
Speaking on a panel at the SuperReturn conference in Frankfurt, Schwarzman suggested the public markets were “over-rated” as a fundraising tool. He also said that KKR had deliberately spoiled the chances of other firms raising money using this method. He said: “KKR destroyed the market for anyone else… which I think was their objective.”
He argued that Apollo Management's listed vehicle, which raised $1 billion less than the expected $2.5 billion, proved this point.
If you didn't know Mr Schwarzman better, you might say it was sour grapes. But surely the boss of the firm currently raising the world's largest buyout fund doesn't care that much. As Jake La Motta said in the closing lines of Martin Scorsese's Raging Bull: “Go get 'em champ.”
And the industry did manage to roll out a champ. Like LaMotta, he has seen better days. But history will never strip him of his achievements. Enter Tony Blair.
Who better than the UK Prime Minister to mount a defense of private equity, as it faces a growing chorus of critics? In March, Blair was asked whether he shared the concerns expressed by Labour backbenchers and trade unions that venture capitalists were little more than asset-strippers.
In response, he said that private equity firms play an “important function” in the economy: “Britain is one of the number one places in the world for private equity and I think the private equity market brings a lot of benefits to our economy,” Blair said at his monthly press conference. “Now it is important that everyone behaves responsibly; but you have just got to be very careful of these issues, otherwise you end up in circumstances where concerns about maybe a minority of specific issues in specific circumstances end up tarring a whole sector, and I don't think that would be fair at all.”
He added: “Some of those who are private equity people or venture capitalists perform an important function in our economy, so we need to be careful.”
Blair's comments came after the revolt against private equity firms had gathered more pace, notably led by the GMB union in the UK. The union's leader Paul Kenny had written to 100 Labour MPs and called on the Chancellor to end tax relief on interest payments of corporate debt, a central plank of buyout structures.
Of course Blair alone will not stem the tide. And powerful advocate though he is, the industry needs to do a better job for itself. Guy Hands, chief executive of Terra Firma, told his colleagues gathered in Frankfurt that the buyout industry needed to improve its relations with the public because of the growth in its importance.
His message was well-timed: within a fortnight, the BVCA had launched a working party to look at improving the industry's transparency.