A dozen purple-shirted SEIU members recently descended on San Diego, to attend KKR’s annual limited partner meeting. Their goal was to get inside, and then ask KKR bigs about the firm’s lobbying efforts to preserve current tax treatment on carried interest and leveraged loan interest. They also wanted to ask if the firm’s new infrastructure investment platform would result in job losses for state employees.
All good questions, and ones that KKR should answer. But it should be pension fund fiduciaries asking at an annual LP meeting, not rank-in-file SEIU members. As such, this was a case of noble intent marred by sophomoric execution.
Many of the SEIU members in San Diego were indirect LPs in KKR, in that they contribute to pension systems that invest in KKR funds. The firm has tens – if not hundreds – of thousands of such investors, and it would be impossible for it to respond to each of their concerns. That’s why each pension selects or elects fiduciary representatives that interact directly with the firm (and get to attend the San Diego meeting). Rank-and-file SEIU members should request that their fiduciaries ask questions on their behalf and, if denied, then they should petition to have those fiduciaries replaced.
Now I realize that this comes across as an elitist argument, particularly from a reporter who does have access to PE decision-makers. And it may seem to fly in the face of my belief in the power of grassroots organizing. But there is simply no reasonable way for KKR to open up the meeting to any indirect LP who wishes to attend, and still provide anything of value to attendees (most of whom are there representing other indirect LPs).
An SEIU spokeswoman tells me that at least one trustee did ask “hard questions” — although it’s unclear how it went. She also says that the members “plan on forwarding their questions to the trustees of their boards, whether they were in attendance or not.”
Good — but all of that should have happened first, not second.