Water Street Will Not Take Illinois Money if Kirkpatrick Wins

Yesterday we wrote about Kip Kirkpatrick, a co-founder of Water Street Healthcare Partners who recently announced candidacy for Illinois State Treasurer. In it, we noted that the local private equity community has rallied around Kip’s candidacy, including more than $35,000 in campaign contributions from his former Water Street colleagues. Other contributors include execs from firms like GTCR, One Equity Partners and Willis Stein.

All of this made us wonder if these contributors were shooting themselves in the foot? Not because of Kip’s politics or potential job performance, but rather because he is basically running to become the state’s chief investment officer. If he wins, and if the SEC enacts those “pay-to-play” proposals regarding political contributions, then firms like Water Street and GTCR would be temporarily banned from raising money from public pension systems in Illinois… Are the contributions worth the risk?

We put the question to Water Street, which this morning provided the following response: “While we cannot comment on the identity of our individual investors, we can tell you that Illinois state pension funds have not been and are not a focus for Water Street Healthcare Partners. When Kip informed us of his decision to run for Illinois state treasurer, our firm made the decision that because of our prior relationship with Kip, we will not solicit money from any Illinois state pension fund if he is elected to the treasurer position.”