This past summer I wrote that Mitt Romney represented a dilemma for private equity:
He is a former buyout baron who generally supports policies that are in the industry’s best interests. At the same time, however, his very presence in a general election would foist a great deal of scrutiny not only on his own record at Bain Capital, but on private equity as a whole. And, like with any financial industry, private equity has a whole bunch of skeletons it would prefer to keep buried (particularly when its tax rates are being regularly thrown around as political footballs).
And it seems I’m not alone in my analysis. Tony James, president of The Blackstone Group (BX), was on CNBC last week to explain why private equity is an economic boon for for America’s economy (a thesis I agree with, even if I also think PE pros should pay more in taxes). You can get his full explanation here.
Near the end of the interview, James gets asked if private equity’s reputation will improve in Washington, DC. His reply:
“I suspect that if Mitt Romney gets the Republican nomination it will get worse because I think his Achilles Heel… the Democrats will perceive that as attack him on private equity just as Teddy Kennedy did in Massachusetts and I think they’ll villanize the industry even further. So I’m not sure it gets better, but it’s not right.”
Watch the whole video below:
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