Private Equity: emerging from the shadows?
A wave of bad publicity over the excesses of some private equity funds has prompted a charm offensive as funds begin to emerge from the shadows.
Having captured the headlines at the World Economic Forum on the pitfalls of private equity, UNI General Secretary Philip Jennings now has invitations to meet key equity groups in the UK, France and the United States.
In the UK an invitation to meet the BVCA - the British private equity and venture capital association - was issued (and accepted) through the letter columns of the Guardian newspaper.
It was revealed today that in the UK our affiliate GMB has been invited to meet the managing partner of Permira - the fund that bought the Automobile Association (3,400 job cuts followed) and Bird’s Eye frozen foods (490 threatened redundancies in Hull). The BVCA has also been in touch with GMB.
The decision by Permira boss Damon Buffini to meet the GMB is significant as one of the problems unions face when dealing with companies bought out by these funds is that they meet management teams installed by the buyout fund. But to change minds over mass redundancies, for example, unions need to be able to deal direct with the real power brokers - the owners, who often stay firmly in the shadows.
In a letter to the GMB’s Paul Kenny, Damon Buffini says “We are proud of what Permira has achieved … We are committed to having an open and constructive relationship with trade unions”. The GMB told the media that it hoped the offer of a meeting is “not a public relations stunt”.
Parliamentarians have similar problems in getting to the private equity decision. UK Labour MP Bob Blizzard told a global union conference on the growth and growth of private equity companies - hosted in Nyon by UNI last November - of his experiences trying to meet Permira over the Bird’s Eye buyout and its implications for his constituents in Lowestoft.
A key decision from the Nyon conference was to campaign to drive private equity funds out of the shadows and put them in the public and political spotlight.
The conference also called for tougher regulation of private equity buyout funds - putting the issue on a political agenda. In the UK some Labour parliamentarians and the GMB are pressing for an end to the tax benefits of private equity funds
“We are ready to talk to these funds - they are too big to ignore and there are too many jobs at stake,” said UNI’s Philip Jennings. “We don’t want public relations, we want a recognition that workers are stakeholders and that their interests should not be sacrificed in the process of squeezing bought up companies for the last centime.”