Buyout Politics: Breaking Down The PEGCC's 2012 Private Equity State-By-State Data

The Private Equity Growth Capital Council released an interactive site profiling PE and pension returns within each state. Here's why the data matters in a political sphere.

privateequityatwork.com

Before we begin...

It is important to mention that the PEGCC is the official lobbying group for the private equity industry. However, knowing the way they obtained their data, it's an unbiased collection, especially when the Association for Corporate Growth (ACG), an advocacy organization which has also called out the PE industry on its failures, has worked with the PEGCC & data providers to churn out the results.

Ok, let's get to it.

The data...

The PEGCC's State-By-State breakdown combined data from private equity data aggregator Pitchbook to analyze the performances of private-backed companies. From facilities and employment data to pension returns and congressional district performance, it's pretty detailed.

The bigger question about what this data means is looking at the political parties that control the districts and states. For example, looking at the Congressional District data above, Democrats occupy 10 of the Top 20, with the following ranks in Billions of Dollars in Investment Value:

#2 - Sheila Jackson Lee ($15.6B)

#3 - Danny Davis ($6.5B)

#6 - Nita Lowey ($5.1B)

#8 - Jared Polis ($5.0)

#11 - Jim McDermott ($4.0B)

#12 - Carolyn Maloney ($3.9B)

#16 - Pete Visclosky ($3.5B)

#17 - Jackie Speier ($3.4B)

#18 - John Tierney ($3.4B)

#20 - Kathy Castor ($3.0B)

That's $53.4 billion in overall investment value from private equity alone.

Election Season ≠ Politics Season

Why am I focusing on Democrats to start with? When Romney and Bain came into the picture last year, Obama's campaign hit Bain Capital and the private equity industry hard. While members of the campaign walked back part of their statements (e.g., Stef Cutter saying they were focusing on Bain and not the private equity industry in general), the anti-private equity fire still got fueled.

Then again, Democrats aren't entirely to blame for the backlash. A handful of Reupublicans for some odd reason blasted the industry during Romney's Primary. Rick Perry was the original coiner of "vulture capitalism" (which became a lightning rod buzzword for both parties) and Newt Gingrich even took shots.

Looking at state pension performance through private investments comes to prove how hypocritical Governor Perry is by trashing PE...

privateequityatwork.com

The Texas Teacher's Pension Plan has $11.1 billion in private equity (a ranking of #6 overall among pensions). To see it have a 13.1% return in 2012 and rank #2...well, the conclusion's pretty self-explanatory.

With regards to Newt Gingrich, he represented Georgia's 6th District when he first started out in politics (which ranks #13 in the districts chart at $3.8 billion in investment value).

Finally, let's take a look at states overall by number of private equity investments and investment value and correspond to Democrat- and Republican-heavy voting...

privateequityatwork.com

Using Politico's 2012 Election Results Map, the breakdown from Democratic and Republican voter states within the Top 20 are...

DEMS: 12 out of 20 (CA, CO, IL, FL, NY, PA, NJ, OH, MI, WI, MA, WA)

REPS: 8 out of 20 (TX, GA, NC, IN, MO, UT, AZ, OK)

Private equity helps both parties in a political sphere. It's just unfortunate that the election season shined an awkward spotlight, but it's up to the politicians themselves to take the data and see what's really going on in their states.