Steve Judge, the long-time VP of goverment affairs at the Private Equity Growth Capital Council and since last summer its interim chief, was named earlier this week to be its permanent president and CEO. I caught up with Judge this morning to ask about the PEGCC’s response to the debate raging over the virtues of private equity, about the outlook for carried interest taxation, and about the council’s imminent launch of a new media campaign.
Steve, what do you see as the association’s biggest challenge right now?
The biggest challenge facing the asset class is continuing to present the best possible image—to show how private equity grows companies, how it drives competition, and how that benefits the entire economy. An additional challenge is to show the benefits of private equity to investors—the pension funds, the endowments, the foundations—given the superior returns they receive.
What would you point to as your biggest accomplishment since you became interim head of PEGCC last summer?
One of the things I’m very pleased with is the focus that we’ve put on telling our story to policy-makers and opinion leaders across the country. That’s a renewed focus that we’ve had in the last six months. We expect that to really benefit the members as we go forward. We’re doing this in an incredibly challenging environment right now. In 64 instances in the last six months we’ve had portfolio company CEOs meet with members of Congress and other opinion leaders. In all those meetings we’ve really fleshed out what it means to have private equity investments in their states and districts. In some cases we introduce a member of Congress or senator to a portfolio company CEO in their districts. They get to see the facilities there, get to meet with the workers, get to see how that company benefits the community. In other cases we bring portfolio company CEOs here to Washington DC to meet with members of Congress and senators and to tell their stories in their offices.
Tell me about the new media campaign you’re about to launch.
We have a very good story to tell. The success of private equity investment in driving growth and providing superior returns to our investors is really a very positive story. What we plan to do is to continue to educate policy-makers about the importance of this asset class, through person-to-person meetings, commissioning studies, and reporting on the nature of private equity investment and the economic benefits it provides. We intend to engage with opinion leaders throughout the country who are influential in determining future policies for our country. We’ll do that through the use of social media, education through our Web site, we’ll do that through portfolio company visits and CEO visits, which bring the investments to a very personal and local level. This is going to be an unprecedented initiative on our part and it’s going to be responsive to the pressure and attenion we’ve received over the last few months. We’re going to have a very robust reponse and robust effort on our part to tell the private equity story.
When will it start?
Very very soon, and we’re going to be utilizing every tool at our disposal. We’ll be using a wide variety of methods and means to communicate with opinion leaders, people in the media and the public. Online advertising is something that makes a lot of sense and is very cost effective. We’re leaving open the possibility of doing other things. We’ll use social media, online advertising and person-to-person meetings to enable those who benefit from private equity investments to tell their story.
Looking ahead, how will you manage to balance the needs of the big GPs, who pay most of the membership fees and the medium-sized GPs?
First off it’s been a tremendously successful organization in developing a consensus for what is in the industry’s best interest. I’ve been very pleased that the large firms, the growth capital firms and the mid-market firms all share many of the same goals. Our focus will be on things that benefit the industry as a whole. The first thing is to make sure we’re communicating in a positive way about the effectiveness and benefits and contributions of private equity and growth capital investments to the American economy. Second we’ll focus on several key tax issues that will be important to the entire industry, whether that’s carried interest or the tax treatment of flow-through vehicles. We’ll continue to focus on regulatory developments resulting from the increased regulatory scrutiny that private equity will receive in coming years and we’ll represent the industry at the agencies. Last, we’re going to grow our research capabilities, to provide information about the industry to the public as well as to be a resource to our member firms. We’re looking at doing research built around specific public policy issues likely to be taken up in comprehensive tax reform legislation later on this year and in the first part of 2013. This research will be used to analyze the effect that different legislative proposals have on the economy and on our member firms.
Edited for clarity. David M. Toll is the editor-in-charge of Reuters Buyouts Magazine. Follow him at @davidmtoll; follow Buyouts Magazine @buyouts.