Private equity creates jobs and supports communities across America
This week, some of the world’s leading investors, executives and policy experts are gathering at the annual Milken Global Conference to discuss trends in philanthropy, business and public policy. I am proud to attend as a representative of the private equity industry to highlight the new opportunities these investments create for workers and companies across our country.
Over the last five years, private equity invested $3.4 trillion into American businesses, both big and small. Those investments helped create and sustain jobs for millions of workers across the country, and the returns helped fund the retirements of millions more. Across the nation, approximately 35,000 private equity backed portfolio companies collectively employ 5.8 million workers in all 50 states. To put this in context, private equity employs more American workers than Amazon, Walmart and UPS combined.
As President of the American Investment Council, I’m speaking at the Milken Global Conference to remind the country’s leading policymakers and business executives that the benefits of private equity extend far beyond the centers of finance and technology. I want everyone to know that, first and foremost, private equity supports entrepreneurship, provides industry expertise and creates lasting growth for both businesses and workers.
This week, the AIC released its Top States and Districts Report, which details how much private equity invests in every state and congressional district. Private equity continues to invest in communities all over the country that are economically, geographically and culturally diverse. Texas topped the state rankings, with private equity investing $111 billion in 482 Texas-based businesses in 2018 alone. California finished a close second, with 655 Golden State businesses receiving $86 billion in private equity investment last year. New York, Tennessee and Minnesota rounded out the top five.
Half of the congressional districts in the rankings are in bustling cities and urban areas, while the other half are in suburban and rural communities. In the Dallas suburbs, private equity invested $26 billion in 20 businesses based in Rep. Van Taylor’s (R-Texas) district. In the heart of downtown Nashville, private equity invested $18 billion in 29 businesses in Rep. Jim Cooper’s (D-Tenn.) district.
The returns from every private equity investment also help fuel the pension plans of teachers, firefighters and other public servants across the nation. Private equity is the highest returning asset class for public pension funds nationwide. Here in California, CalPERS CIO Ben Meng recently said that, “We need private equity, we need more of it, and we need it now.” Without these robust private equity returns, many pension funds would struggle to meet their obligations.
You don’t have to be a financier or tech entrepreneur to benefit from private equity. Our industry provides expertise and capital to small business owners in Texas while strengthening the retirement of school teachers right here in Los Angeles. We have a great story to tell, and I am proud to help tell it.