Private Equity Industry

August 22, 2008

Private Equity Industry

How to Improve the Private Equity Industry’s Reputation

The private equity industry has suffered from a negative public perception largely stemming from a lack of transparency. The annual Davos World Economic Forum discussed how the private equity industry could improve their reputation, here are some of the solutions offered by the co-founder of the Carlyle Group David Rubenstein:

  • Improving Transparency: The most important change that the private equity industry must address is the lack of transparency over how the industry operates. To do this private equity groups must appeal to more than their investors by reaching out to labor unions, public groups and communities effected by deals.
  • Opening to the Media: The media has played a major role in portraying the private equity industry as secretive and untrustworthy. This stereotype is furthered by the private equity industry’s reluctance to respond with openness toward media. Recently, private equity has made attempts to improve its relationship with the media and its critics but more needs to be done to repair its poor public image.
  • Focusing on Benefits: Private equity has been charged with primarily focusing on profits while the public suffers. As I’ve mentioned previously, a report on private equity revealed that in the majority of acquisitions by private equity groups employment in the company actually rises. Reports and data like this should be used by private equity groups to combat criticism. Despite some highly publicized negatives, the private equity industry has positive effects that it should capitalize on to improve its public image.

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Tags: Private Equity Industry, Improving the private equity industry, private equity reputation, private equity pr, private equity public relations, private equity industry and the public

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