Buyouts/PE HUB: PEGCC Chairman Ken Mehlman talks politics, Dodd Frank

By David Toll

Sister publication Buyouts sat down on March 20 for a Q&A with Ken Mehlman, who was elected chairman of the Private Equity Growth Capital Council late last year. We met at the offices of PEGCC founding member Kohlberg Kravis Roberts & Co, the diversified buyout shop where Mehlman is a member and global head of public affairs.

What do you see as your priorities in your first year as chairman?

First of all I would say that thanks to the great work of Steve Judge (PEGCC president and CEO) and the team at the PEGCC the industry has done a very good job of engaging in dialog with policy makers about how we encourage more economic growth and also about how we make sure growth is sustainable from a financial system perspective. Our hope is to continue that dialog and make sure that where possible we can be part of the solution to how we have better economic growth and more retirement security for millions of Americans.

How is the effort going to convince Americans and their representatives that private equity is a force for economic good?

What we hope to have is a two-way dialog. We hope to listen as much as we try to persuade. What we try to do is explain some statistics. We know that in 2012, $347 billion was invested by private equity in 2,083 U.S. companies. We know that if you look from the downturn five years ago to 2012 $30 billion (of private equity) was invested in American companies that had filed for bankruptcy and that employed 250,000 people. We know if we look around the country that both companies and municipalities are looking for capital to grow, to meet important needs, to ensure retirement security. In all of these areas we think we can be part of the solution. Our hope is to highlight companies that have been enhanced by our investment and by our hard work and also to point to millions of retirees who today have more security and enjoy a better time in their golden years because their pension fund decided to participate in private equity.

What regulatory issues are still a little under the radar with your members?

While Dodd-Frank wasn’t aimed at the private equity and growth capital industries there will be very important rules and regulations that impact directly our ability to operate, and to create value. One example would be rules aimed at banks that were put in place under Dodd-Frank to address swap positions. The implementation of that rule could affect entities that are not banks, including end-user companies that are owned by private equity. Making sure that rule is implemented in a way that is consistent with the legislative intent of Dodd-Frank is in our interest and something the PEGCC is actively engaged on.

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