1. Kohlberg Kravis Roberts, TPG and Goldman Sachs
The heavyweight trio agreed to buy Texas-based energy company TXU for $45 billion in 2007 in the largest buyout to date. Key to the approval of the deal was the high-profile backing of key environmental groups, which publicly touted the firms' proposed green policies. By 2009, TXU's debt ratings had been slashed due to high leverage and limited flexibility but at least it could boast green credentials.
2. Lone Star
Although it had previously kept out of the spotlight, Dallas-based private equity firm Lone Star came out swinging publicly in 2006 when its sale of Korea Exchange Bank (right) was held up by a South Korean government investigation into possible price manipulation. The firm responded to perceived media bias by holding its own press conference, led by chairman John Grayken, and describing the investment environment in the country as being “anti-foreign”. A court eventually cleared the way for the sale, but not before Lone Star lost out on two highly profitable potential sales of its stake.
3. Private Equity Council
In early 2009 members of Washington, DC-based lobby group the Private Equity Council (PEC) – including buyout firms Bain Capital, Permira and Apollo – signed up to a set of socially responsible investment guidelines. The recommendations, which call for firms to consider environmental, safety and health issues associated with public companies – were applauded by leading pensions such as CalPERS and CalSTRS.
4. British Venture Capital Association
The British Private Equity and Venture Capital Association (BVCA) in February this year formed a group to promote clean-tech investment. The Energy, Environment and Technology group was launched “to provide guidance and advice to government, investors and companies active in the renewable energy and clean technology sectors”. With 12 initial members, chaired by Hg Capital's Tom Murley, the launch appeared prescient as investment in this area continues to gather pace.
5. Kohlberg Kravis Roberts
KKR's environmentally and socially responsible investment strategy has been honed during a year in which it has increased its public profile image-building efforts ahead of a planned listing. The formerly low-key firm has put more information on its website, hired several high-profile communications staff and created a global public affairs division. In February it said that three of its portfolio companies saved $16 million through green policies. It also pledged similar pro-environmental strategies across its US portfolio.
6. Terra Firma
While a number of firms signed up to the transparency guidelines drawn up in the UK by Sir David Walker, Guy Hands's Terra Firma went far beyond the report's minimum disclosure requirements in 2008. The move was unsurprising, as Hands has long advocated openness by firms in order to improve the industry's image.
7. The Carlyle Group
The Carlyle Group for the first time released its annual report to the public through its website in 2008. The firm, which was ramping up its transparency efforts after signing on to the Walker guidelines, had previously compiled its annual reports for limited partners' eyes only.
8. Confederation of British Industry
Weeks after some of the UK's biggest buyout houses turned to the Confederation of British Industry to get a positive message out to the public, director general Richard Lambert (pictured left) in August 2007 lambasted private equity firms for not explaining the industry better. “Until recently, too few firms have been willing to stick their heads above the parapet,” he said.
9. European Venture Capital Association
During its annual symposium in Rome, the new chairman of the European Venture Capital Association said European firms must not be shy about taking on their critics. As such, Helmut Schuhsler announced that the EVCA would divide into three distinct platforms to better represent venture capitalists, mid-market buyout firms and mega-funds.
Taking a cue from some of the larger public pension funds, US retailer Wal-Mart announced in 2005 a $25 million private equity fund targeting women- and minority-owned businesses. By July 2007 half the fund had been invested in five companies, although its original operator – Aldus Equity – was hit by a scandal in April when founder Saul Meyer was indicted for an alleged kick-back scheme.