|Today, American Investment Council President and CEO Drew Maloney released the following statement regarding Senator Elizabeth Warren’s anti-private equity legislation that would destroy jobs on Main Streets across America, discourage economic growth in local communities, undermine Build Back Better priorities, and threaten retirements:
“This bill should be renamed the Stop Main Street Investment Act – because that’s what it would do. As families and local economies across the country continue to struggle, Senator Warren’s irresponsible bill would discourage small business investment, destroy jobs, hurt retirements, and threaten investments in important fields including sustainability and life sciences.
“We encourage Senator Warren to consider how private equity is helping her own local community. In her home state of Massachusetts, the private equity industry directly supports over 307,000 jobs, invests in over 545 companies, and recently delivered FY 2021 returns of over 72% to strengthen public servants’ pensions.
“It’s concerning that Senator Warren continues to vilify an industry that directly benefits so many of her constituents and their families. Private equity has a strong record of investing successfully across America, creating jobs, supporting climate and life sciences research, and strengthening retirements for hard working public servants.”
During 2020 and throughout the global COVID-19 pandemic, the private equity industry invested in every state across America and these investments were overwhelmingly successful. According to a recent report from the American Investment Council prepared by Ernst & Young LLP (EY US), the private equity industry and private equity backed companies:
- Directly employed more than 11.7 million workers in the United States in 2020 – and over 307,000 workers in Massachusetts.
- Generated $1.4 trillion of gross domestic product (GDP), or approximately 6.5% of total GDP.
- Paid $218 billion in federal, state and local taxes last year.
- Invested heavily in small businesses – of all the businesses receiving private equity investment, 86% employed 500 or fewer workers. Roughly a third employed just 10 workers or less. These small businesses represent the backbone of the American economy, and their strength will be critical to a sustained recovery.
The American Investment Council’s 2021 Public Pension Study shows that private equity continues to be the best returning asset class in public pension portfolios. In 2020, private equity continued to provide a strong return on investment, with a median annualized return of 12.3 percent over a 10-year period. The Massachusetts Pension Reserves Investment Trust which had a 10-year annualized return from private equity of 15.03 percent as of June 30, 2020, net of fees. For FY 2021, private equity generated gross returns of over 72.2% for Mass PRIM.