ICYMI – Hendrickson op-ed: Why I’m proud to tell the private equity story

Crain’s Cleveland Business recently published the following op-ed by incoming American Investment Council Board Chair Pam Hendrickson regarding her new role and the private equity industry’s commitment to building better businesses across America.

Read the full op-ed below:

Why I’m proud to tell the private equity story
Crain’s Cleveland Business
By AIC Board Chair Pam Hendrickson
January 15, 2022

Tate’s Bake Shop started as a small, local bakery on Long Island. With the help of private equity, their cookies now occupy grocery-store shelves around the country. Tate’s holds a special place in my heart because our firm, The Riverside Co., worked closely with its founder, Kathleen King, to help transform this local baker with a loyal following into a national brand that engenders similar devotion.

These small-business investments are a big reason I am so proud to be in private equity. Our industry helps transform businesses, create jobs and strengthen retirements for workers across the country. I am grateful to help the industry tells its story as the incoming board chair for the American Investment Council (AIC), the industry’s leading advocacy and research organization. I am excited to educate people about private equity’s contributions to the country’s long-term economic growth and the retirement security of American workers.

I joined Riverside in 2006, after 21 years as a banker at JP Morgan, and I’m extraordinarily proud of the work we have accomplished partnering with businesses of every size to help them grow and succeed. Last year, private equity invested more than $1 trillion in the United States economy. The overwhelming majority of those investments — representing 84% of the thousands of businesses that received private equity funding — went to companies with 500 or fewer employees. A third of those businesses employed 10 or fewer workers.

The American Investment Council provides our industry with an opportunity to tell its story to policymakers, the media and the workers and retirees who benefit from these investments. I first became involved with the AIC in 2011 when Riverside joined as a new member. At the time, the AIC was looking for someone to tell members of Congress how private equity firms like Riverside worked to support and grow small businesses. I have not forgotten how powerful it felt to tell our story before Congress. I have remained an active member of the AIC ever since and have seen our membership double in size. I urge more firms to join and share their stories.

We are working to make sure more policy makers in Washington understand how private equity provides companies with capital and management expertise to scale and to navigate difficult periods in their business cycle. The American Investment Council also does the important work of compiling and publishing data and reports that show how private equity has a positive impact on the American economy. Its annual pension report continues to show how private equity delivers the highest returns for retirees and remains the strongest asset class year after year.

The AIC also helps firms like ours highlight our own work in local communities. During the COVID-19 pandemic, we highlighted how Riverside-backed Bentley Laboratories, which traditionally produced cosmetics, shifted its production lines to manufacture hand sanitizer. In a short span, Bentley produced more than 9,000 units of hand sanitizer critically needed for local first responders and health care workers in New Jersey amid shortages in the early stages of the COVID-19 pandemic.

The American Investment Council also works to educate policymakers about private equity’s impact in communities across the United States. For example, Riverside-backed Black Rock Coffee is a fast-growing business with 70 locations in seven western states. Like many food service businesses, Black Rock struggled to navigate necessary but difficult COVID-19 safety protocols. Fortunately, Riverside stepped in and provided capital and expertise to help the business keep its doors open. In an interview last year with The Hill, Black Rock Coffee CEO Jeff Hernandez stressed the benefits of private equity’s long-term investment strategy. “They saw through the madness and chaos of everything going on in the world,” he said.

As the incoming chair of the board for the American Investment Council, I want to help more people understand how private equity is all around them. In my personal experience, once people learn that private equity helps build better businesses, supports the jobs of millions of Americans and generates outsized returns for public pension funds, they come to realize how important our industry is for the American economy. I’m excited to help the AIC tell this powerful story.

Hendrickson is the chair of the board for the American Investment Council and vice chairman of The Riverside Co., which is co-headquartered in Cleveland.