With the US presidential election looming at press time, Democratic US presidential candidate Barack Obama leads in donations contributed by private equity and venture capital executives, according to the Center for Responsive Politics, although Republican candidate John McCain has buyout giants including Kohlberg Kravis Roberts co-founder Henry Kravis and The Blackstone Group co-founder Stephen Schwarzman in his corner.
Through July, individuals from a category designated by the independent, non-profit research group as “private equity and investment firms”contributed a total of $1.1 million to Obama and $877,000 to McCain. Individuals from venture capital firms contributed $820,000 to Obama and $365,000 to McCain.
Obama's high-profile supporters include Apax founder Alan Patric of as well as Kleiner Perkins Caufield & Byers head John Doerr.
The data goes against the perception that McCain should be heavily favoured by private equity executives due to his support for the treatment of carried interest as a capital gain. US union the Service Employees International Union (SEIU) has aggressively attacked McCain for his support of this Obama-opposed “tax loophole”that contributes to the profits of buyout firms.
The SEIU has gone so far as to protest at the presidential hopeful's Virginia headquarters, citing McCain's receipt of donations from private equity executives, particularly Kravis.
The Center for Responsive Politics, which tracks money in US politics and studies its effect on elections and public policy, defines private equity and investment firms as “companies that provide funding, financing, capital, research, management guidance and administration, and/or take equity stakes in companies or ventures”.
Although the numbers favour Obama, McCain has some heavy hitters in his corner. A July fundraiser in Long Island, New York, for McCain fetching $28,500 per head had some of the most powerful people in private equity on its host committee, according to an invitation obtained by PEI.
The host committee included: Kravis, Schwarzman, Apollo Global Management co-founder Marc Rowan, Elevation Partners co-founder Bret Pearlman and New Mountain Capital founder Steven Klinsky.
Rowan's fellow Apollo co-founders Josh Harris and Leon Black are among other major private equity figures who have donated to the McCain camp as well as TPG co-founder David Bonderman and WL Ross head Wilbur Ross.
Bank of America's merger with Merrill Lynch will result in the creation of a private equity and global operations division headed up by Brian Moynihan, previously BoA's president of global corporate and investment banking. The bank's private equity business manages about $7.4 billion in private equity capital.
Edward Liddy, an operating partner with private equity firm Clayton, Dubilier & Rice, has been appointed to head ailing US insurance giant American International Group. Liddy, the former chairman and chief executive of Allstate, replaced AIG's chief executive officer Robert Willumstad, who was forced to step down from his role by US Treasury Secretary Henry Paulson.
The US government has chosen John Koskinen, a director with publicly traded private equity giant American Capital, to serve as board chairman of the Federal Home Loan Mortgage Corporation, better known as Freddie Mac. Koskinen will join another private equity executive, David Moffett, in Freddie's senior management.
Simpson Thacher & Bartlett will advise the US government as it makes private equity-style plays, using $250 billion to buy preferred equity stakes in banks to shore up the US financial sector. The New York-based law firm is the sole advisor for the emergency bank equity plan. Simpson notably represents private equity firms including KKR and The Blackstone Group. tement.
Luxembourg-based CVC Capital Partners has formed a US-based advisory board to help the firm develop investment opportunities in the US. The board members are: Stephen Bollenbach, former Hilton chief executive; Rose Marie Bravo, former chief executive of luxury goods company Burberry; and Brad Martin, former chairman and chief executive of Saks Holdings.
UK-based 3i has hired Bob Stefanowski to lead its growth capital and infrastructure investment efforts in North America, giving him the newly created role of managing partner and chairman for 3i North America. Stefanowski has spent the last 14 years at General Electric, most recently as chief executive of its European corporate finance division.
Former governor of the state of New York George Pataki has joined private equity firm MidOcean Partners' executive board. The Republican governor will help support the New York-based firm's investment professionals and provide counseling to MidOcean's portfolio companies. Pataki served three terms as governor from 1995 to 2006.
Lower mid-market specialist VMG Partners has promoted former TSG Consumer Partners vice president Kara Cissell-Roell to managing director. Roell, 33, helped launch VMG in 2005 when five of VMG's current partners spun out of private equity firm The Shansby Group. After the spinout, Shansby rebranded as TSG Consumer Partners.
Catalyst Investors has hired former Citi executive Gene Wolfson to help guide the firm into new areas of growth. Wolfson most recently led Citi's distressed equity trading group. He said he will liaise with Catalyst's investors as well as help the firm explore other investment opportunities.
US investment firm Evercore Partners has appointed former Perseus managing director Ray Newton as a senior managing director in its private equity group, Evercore Capital Partners. During his nine years with mid-market-focussed private equity firm Perseus, he played a major role in several transactions including the firm's $305 million exit of shoe company Converse to Nike.
Mid-market specialist LLR Partners, fresh from the close of its $800 million third fund, has hired long-time Apax Partners dealmaker Gregory Case as a partner in the firm's Philadelphia headquarters. Case spent the past 16 years at Apax before leaving the London-based firm's financial services group early last year.
Mid-market private equity firm Littlejohn & Co has moved its chief financial officer, Deborah Jorde, to the newly created role of investor relations and fund marketing support. Kenneth Warren, formerly vice president of finance at New York investment firm Quadrangle Group, will take over the role of CFO at Littlejohn.
David Mott, former chief executive of biopharmaceutical company MedImmune, has joined venture capital firm New Enterprise Associates as a general partner. Mott will join fellow MedImmune alum Edward Mathers in NEA's healthcare practice, focussing on investments in biotechnology and specialty pharmaceutical companies.
Kleiner Perkins Caufield & Byers has hired Eric Keller as chief operating officer. As COO, Keller will offer both financial and operational expertise to the firm and its entrepreneurs in the greentech, digital and life science technologies sectors.
MEGA-FIRMS TACK ON
Providence Equity Partners, which specialises in media and entertainment companies, has hired Thomas Gahan as president of the company's recently established debt investment programme. Gahan was the securities chief executive for Deutsche Bank, where he helped expand the company's mergers and acquisitions, equity, and corporate advisory operations.
Harvard Business School dean Jay Light has joined The Blackstone Group's board of directors. Light's areas of expertise include capital markets and institutional asset management, including the management of pension funds and endowments, as well as the entrepreneurial management of technology companies.
Stephen Schwarzman, chief executive and co-founder of The Blackstone Group, is the wealthiest private equity investor listed on this year's Forbes 400 list of the richest people in America. His personal net worth is estimated at $6.4 billion, while Sam Zell, founder of private equity real estate firm Equity International, is listed as having $5 billion.
Former Advent International partner Beverly Berman has joined Thomas H Lee Partners as a director in the firm's investor relations group. Berman will work with managing director Gregory White. At Advent, Berman was a senior member of the firm's limited partner services group, responsible for investor relations and fund marketing activities in North America.