With the US presidential election less than three months away, surveys have President Barack Obama polling slightly ahead of Republican challenger Mitt Romney as of press time.
But that advantage is certainly not apparent in the private equity industry, where many firm executives have been declaring their allegiance in the presidential race via their cheque books. As of June, individuals listing private equity or venture capital firms as their employer/ occupation on donation documents had given more than $9.3 million to Restore Our Future, a no-limit ‘super’ political action committee supporting Romney’s run for the presidency. By comparison, a super-PAC backing Obama had raised only $434,000 from industry professionals as of press time, according to a Private Equity International analysis of US Federal Election Commission documents.
The stark difference in totals can be attributed to a number of factors; it has been suggested, for example, that Restore Our Future has been more proactive in engaging with donors in the build-up to the general election. However, Obama’s case for cash from private equity executives has clearly not been helped by what many sources consider to be his administration’s anti-business sentiment.
“I think the commentary that you hear from the President, where he thinks that profits are not consistent with job creation, and that success is there to be taxed to support programmes that have had very limited success … it’s less the demonisation of any specific group … and more the demonisation of business,” says one GP – a Democrat – on why they donated to Restore Our Future. “I think many think that if the current administration is re-elected, that will get worse and not better.”
The perception that the Obama administration is ‘anti-business’ hasn’t been helped by the ongoing attacks on Romney’s business record. However, the negative ad campaigns haven’t had as large an effect on drumming up pro-Romney sentiment within the industry as you would think, sources say. What may be Romney’s most important advantage is the fact that many industry veterans are familiar with his work at Bain or know him personally.
“I’ve also known Mitt for a very long time,” the Restore Our Future donor tells PEI. “I’m actually enthusiastically supporting Mitt.”
Few know Mitt as well as those at Bain Capital, which Romney helped launch in 1984. Although he has not had an active role at the firm in more than a decade, approximately 55 individuals listing Bain as an employer have broken out their wallets in support of the firm’s former boss, giving almost $125,000 to his principal campaign committee, according to FEC documents.
Unlike donations to super-PACs, which are unaffiliated with Romney’s campaign, donations made to Romney’s principal campaign committee are capped at $2,500 per individual. By comparison, Obama’s 2012 campaign committee had received a total of $34,472 from 10 Bain employees as of press time (across the primary and the general election).
“We are not a political organisation, and the firm takes no position on any candidate. However, the Bain Capital partnership contains a wide range of political views and relationships on both sides of the aisle. Contributions made to candidates or organizations are individual decisions,” Bain said in a statement (which echoed a previous letter sent to investors earlier this year).
The private equity industry has faced uncomfortable levels of scrutiny as a result of Romney’s candidacy. But if campaign contributions are any indication, the former Bain chief’s reputation remains intact among his former peers and competitors.