Oct 16, 2019

Elizabeth Warren's frontrunner status is bad news for private equity

Illustration: Sarah Grillo/Axios. Photo by Bauzen/GC Images

Private equity wasn't mentioned by Elizabeth Warren during last night's debate, even though she got more speaking time than any of the other 11 candidates. For private equity, that was the good news.

The state of play: The bad news for private equity was that at least 9 of the other 11 candidates tacitly acknowledged that Warren is now the Democratic Party's frontrunner.

  • Each of the past three presidential administrations has either brought in top PE executives, or included individuals who went on to become top PE executives.
  • It's almost impossible to imagine that would be true of a Warren presidency, from the perspective of both supply and demand.
  • Without a seat at the table, PE is prone to being on the table.

The real test now for private equity is to move past denial and into bargaining, beyond just supporting Trump or one of Warren's Democratic rivals. Will industry leaders publicly give ground on carried interest taxation? Worker protections? Some portfolio liabilities?

The bottom line: Warren has her plan. Private equity needs one, too.

Go deeper: Warren takes aim at private equity after Splinter shutdown

Go deeper

The risks of private equity in health care

Private investment into the health care sector may bring innovation, but it's also led to revenue-seeking behaviors at the expense of patients, three employees of The Commonwealth Fund argue in Harvard Business Review.

By the numbers: There were nearly 800 private equity health care deals in 2018, with a total value of more than $100 billion.

Go deeperArrowOct 30, 2019

Podcast: Private equity is still a man's world

Private equity-backed companies account for around 5% of America's GDP and employ around 6% of all American workers. But private equity decisions are driven by a much more homogeneous group. Dan digs in with The Carlyle Group's Kara Helander.

The growing anti-Warren consensus shows the limitations of her plans

Illustration: Eniola Odetunde/Axios. Photo: Sean Rayford/Getty Images

The Economist came down hard on Sen. Elizabeth Warren last month, describing her regulatory proposals as "jaw-dropping" and warning of "a severe shock" were her plans to be enacted.

The state of play: Similar sentiment has arrived from Steve Rattner, the manager of Mike Bloomberg's fortune, who says that a "Warren presidency is a terrifying prospect." Billionaires Leon Cooperman and Jamie Dimon have also joined the chorus.

Go deeperArrowNov 7, 2019