PE Plays Sovereign Defense

Sovereign wealth funds have become this year’s version of what private equity funds were last year: Populist piñatas being stared down by stick-wielding legislators.

But there is a far deeper relationship between sovereigns and private equity than just scapegoating, as sovereign wealth funds have long been a major source of private equity fund capital. For example, the two largest limited partners in private equity over the past decade were AlpInvest (Dutch government pension) and Temasek (Singapore sovereign). Now you can probably add the sovereign wealth funds of Abu Dhabi to that list.

So it’s not surprising that sovereigns and private equity are beginning to play some common defense. Politico reports that around 30 lawyers and lobbyists met last week at the New York offices of JPMorgan, to discuss the role they can play in protecting sovereigns from additional Congressional regulation/oversight. Who organized the meeting? A representative of The Carlyle Group, which is partially owned by an Abu Dhabi sovereign.

Expect this issue to be top of agenda at tomorrow’s Great Debates here at Buyouts East, where I’m moderating a group that includes reps from the SEIU and PE Council…