PE Hub Wire Highlights, 11.20.19

Clearlake targets $5 bln for next flagship; GTCR, Clearlake seek $2.5 bln-plus in Lytx sale; Emond to lead CDPQ’s PE group

Were we scared for nothing?

Sen. Elizabeth Warren, a leading candidate for president next year, hasn’t been shy about her problems with PE. The Democrat from Massachusetts has claimed private equity firms are vampires that typically bleed companies dry and walk away enriched, or just loot them. Warren has been joined by Rep. Alexandria Ocasio-Cortez (D-NY) in her warning about the evils of PE.

This isn’t the first-time private equity has become the bogeyman some claim we need to fear. The industry suffered an onslaught of bad press when Mitt Romney ran for president in 2012. The American Investment Council, the PE industry’s biggest lobbying group, last month even launched a website advertising campaign to educate Americans about the good private equity has done for the nation.

PE might not need it. According to Politico, yesterday’s Financial Services Committee hearing titled “America for Sale?” suggests Warren will have a difficult time rallying her party against the PE industry next year. During Tuesday’s hearing, business-friendly Democrats and Republicans played down the most controversial effects of the industry’s investments in struggling companies, the story said. AOC even expressed her frustration and was “quite upset” by the initial questions at the hearing. “I wasn’t sent here to safeguard and protect profit,” Politico quotes AOC saying. “I was sent here to safeguard and protect people.”

PEI says the hearing yesterday consisted largely of “predictably clumsily-choreographed thrust and parry between parties on heavily repeated, unusually nuanced, points of debate.” The hearing did not disproportionately focus on retail, but it also didn’t include a comprehensive discussion of LPs’ desire for more transparency from funds, PEI said.

Wayne Moore, trustee for the Los Angeles County Employee Retirement Association, did try, though. Moore’s opening statement included jabs at the industry to push the case for greater transparency, the story said.

In truth, Hubsters, I didn’t watch the hearing. Did you? If so, what did you think?

Deals: GTCR and Clearlake Capital have put Lytx up for sale, Milana Vinn is reporting. Find out how much the firms are seeking here.

CORRECTION: The PE HUB wire stated this morning that Clearlake was targeting $7 billion for its next flagship. That is incorrect. Clearlake is targeting $5 billion for its next flagship, while the hardcap is $7 billion. 

CONTINUE READING