Pegcc annual report_8.25x8.25_022615a_single

P R I VAT E E Q U I T Y G R O W T H C A P I TA L C O U N C I L

A N N U A L R E P O R T

PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 2

2 0 1 4


WHO WE AREEstablished in 2007 and

based in Washington, D.C.,

the Private Equity Growth

Capital Council (PEGCC) is an

advocacy, communications,

member services, and research

organization representing

leading private equity and

growth capital firms united

by their commitment to

growing and strengthening the

businesses in which they invest.

WHAT WE DOThe PEGCC advocates on

behalf of the private equity

and growth capital industry

on Capitol Hill and before

regulatory agencies, educates

the public about the value

of private equity, develops

new research highlighting

the critical role private

equity and growth capital

plays in the U.S. and global

economies, and provides a

vital forum for our members

to discuss industry trends

and challenges.

ABOUT PRIVATE EQUITYPrivate equity is a critical

source of capital investment

in the U.S. Our investment

model is simple: we seek

out companies that have

significant potential for

growth and invest capital,

time and effort to improve

their performance and

increase their value.

Private equity investment

creates stronger, more

valuable American

businesses, and provides

public and private pension

funds, university endowments

and charitable foundations

with superior returns.

Chairman of the Board Ken Mehlman provides opening remarks at our Annual Member Dinner.

FROM THE PRESIDENT

"FOR THE THIRD YEAR IN A ROW, FUNDS RETURNED A RECORD AMOUNT TO INVESTORS, ESTIMATED AT $130 BILLION, AND THE INDUSTRY EXCEEDED $3 TRILLION IN GLOBAL ASSETS."

THE PRIVATE EQUITY INDUSTRY ENJOYED

A STRONG 2014. For the third year in a row, funds

returned a record amount to investors, estimated at $130

billion, and the industry exceeded $3 trillion in global assets.

Simultaneously, private equity faced serious threats; some old,

some new, but perhaps more widespread and substantial than

ever before. Early in the year on Capitol Hill, a tax reform draft

was released that proposed altering the characterization of

carried interest and publicly traded partnership taxation. Soon

after, an SEC director singled out our industry in a high-profile

speech. Throughout the year, a series of major news stories

probing issues such as fees, Leveraged Lending Guidance, and

other topics associated with private equity grabbed headlines.

The challenges were unrelenting. But so were we.

As the industry’s advocate, the Private Equity Growth

Capital Council responded to these threats swiftly and

aggressively. Along with defending our industry, we continued

to develop and grow the Council on behalf of our members.

We expanded our advocacy efforts, increased our media

presence, more than doubled our membership services

and events, opened a new member class, and continued to

produce innovative industry research. In short, we did what

our member firms rely on us to do: provide them with the

tools and services to respond to challenges and create the

best environment possible for their continued success.


I’ll provide just a few of the highlights that

you will find in our 2014 Annual Report.

The Council initiated a targeted, seven-state

Carried Interest Champions campaign to

galvanize support from elected officials, leading

to dozens of Members of Congress publicly

stating their support for private equity, the

current tax treatment of carried interest, and the

support of House Resolution 702; a Resolution

that reaffirms our key belief that private

equity plays an important role in growing and

strengthening American businesses.

Regulatory pressure on the industry

increased. In 2014, we filed 11 comment letters

with multiple agencies in the United States

and around the world. Our General Counsels’

Committee, Regulatory Committee, and

Chief Compliance Officers’ Working Group

were active on these issues and in other

areas which required industry protection. We

will continue to address these issues in the

coming year, and are prepared to address

other regulatory challenges if they arise.

The Council continued to produce excellent

industry research. Among other reports,

our Research team produced our annual

Public Pension Fund Analysis, which revealed

that private equity produced a 12.3 percent

annualized return to the median public

pension over the last 10 years, more than

any other asset class. This analysis

demonstrates how private equity is

enhancing the retirement security for

millions of hardworking teachers, police

officers, firefighters, and administrators.

We expanded our member services as well.

Three new well-received initiatives – the

Chief Financial Officers’ Annual Meeting,

ESG seminars, and our Young Professionals

Network reception – bolstered our member

events calendar. Along with welcoming more

Members and Associate Members, the Council

opened a Fund of Funds class this year. This

new membership class is a testament to the

dynamic nature of firms within private equity,

and illustrates our intention to grow as a fully

inclusive trade association.

In large part, these efforts were possible

through the deep commitment of our Board

of Directors. Headed by our chairman, Ken

Mehlman, the Board’s active role this past

year proved invaluable as we responded to

challenges and advanced the Council. It is

their engagement that allows us to fully serve

our membership, and the industry as a whole

is stronger for it.

Please enjoy our 2014 Annual Report. We

look forward to serving you as we continue

to grow in the year ahead.

Sincerely,

Steve Judge

President and CEO

"Regulatory pressure on the industry increased. In 2014, we filed 11 comment letters with multiple agencies in the United States and around the world. "


2014 WAS A VERY BUSY YEAR FOR THE

COUNCIL. In February, the U.S. House Committee on

Ways and Means Chairman Dave Camp (R-MI) released

a draft of a comprehensive tax reform proposal that

included tax increases on carried interest and publicly

traded partnerships (PTPs). The Council immediately

launched a successful campaign to prevent Camp’s

proposals on carried interest and PTPs from gaining

traction and strengthened public support from

Members of Congress for our positions on these issues.

Our advocacy efforts through the BUILD Coalition

(Businesses United for Interest and Loan Deductibility)

were very successful in preventing limits on interest

deductibility from appearing in Camp’s tax reform

proposal. Ultimately, we had a very successful year

protecting and advancing legislative initiatives and

regulatory issues that matter to our members.

GOVERNMENT & REGULATORY AFFAIRS

REGULATORY POLICYThe Council remained very active on

regulatory issues throughout 2014. We

filed eleven comment letters with multiple

agencies in the United States and around the

world. We also met with key regulators on

various issues throughout the year.

The Government Affairs department’s 2014

regulatory efforts included:

■■ Outreach to the Director of the SEC’s

Office of Compliance Inspections and

Examinations (OCIE) regarding private

equity exams.

■■ Advocating before senior Federal

Reserve Board and Office of the

Comptroller of the Currency staff on

Leveraged Lending Guidance.

■■ Facilitating the publication of a

“consensus interpretation letter” by

15 leading law firms that reaffirmed

the ability of foreign banks to invest in

parallel funds organized by U.S. PE firms

in the Volcker Rule era.

■■ Sustained engagement with the SEC’s

Division of Trading and Markets,

reinforcing that private equity

investment advisers are not broker-

dealers and that they should not have

to register as broker-dealers when they

receive transaction fees.

■■ Submitting multiple comment letters to

the CFTC and meeting with the CFTC’s

new Chairman and Commissioners to

urge revised aggregation relief.

■■ Conducting continuous outreach to the

German Ministry of Finance via multiple

comment letters and meetings to obtain

modifications to proposed regulatory

changes so that German insurance

companies and German pension plans

will continue to be allowed to invest in

PE funds run by U.S. PE firms.

■■ Filing a joint comment letter with the

European Private Equity and Venture

Capital Association to the Financial

Stability Board and the International

Organization of Securities Commissions

regarding proposed assessment

methodologies for identifying Non-

Bank Non-Insurer Global Systemically

Important Financial Institutions,

reiterating that private equity firms and

funds are not sources of systemic risk.

Overall, the Council’s efforts yielded positive

results in 2014. In 2015, the regulatory

calendar will remain full. We expect

regulators to issue several final rules within

the next year, including CFTC aggregation

relief, incentive compensation rules, and

possibly further amendments to Regulation

D, Form D and the applicability of Rule

156 to private placements. In addition, we

3 COMMENT LETTERS

SUBMITTED TO THE CFTC

ON AGGREGATION

15 LEADING LAW FIRMS

SIGNED OUR CONSENSUS

INTERPRETATION LETTER

ON THE VOLCKER RULE

4 COMMENT LETTERS

SUBMITTED TO THE

GERMAN MINISTRY

OF FINANCE


expect that the SEC’s Division of Trading

and Markets will continue exploring whether

the marketing of funds and/or downstream

transaction fees received from portfolio

companies may require PE investment

advisers to register as broker-dealers under

certain circumstances. We will continue

engagement with the SEC’s Office of

Compliance Inspections and Examinations

(OCIE) as appropriate.

In Europe, our sustained engagement with

German policymakers and trade groups on

amendments to the German Investment

Regulation and the German Pension Fund

Capital Investment Regulation will continue.

We will also continue to engage with the

Organisation for Economic Co-operation and

Development on its various Base Erosion

and Profit Shifting proposals. Finally, we

will continue to monitor how the Financial

Stability Board and the International

Organization of Securities Commissions

update proposed assessment methodologies

for Non-Bank Non-Insurer Global Systemically

Important Financial Institutions.

As all of these regulatory processes continue,

the PEGCC will remain actively engaged as

appropriate with our membership, regulators,

agency staffs, and legislators in the United

States and where necessary around the world.

TAX POLICY CARRIED INTEREST AND PUBLICLY

TRADED PARTNERSHIPS

The Council successfully responded to

Chairman Camp’s attack on carried interest

and publicly traded partnerships by initiating

a robust campaign that included three

major activities. First, the Council responded

immediately with active engagement on Capitol

Hill, urging opposition to tax increases on our

key issues. Simultaneously, the PEGCC initiated

a grasstops effort to engage Members on

these issues with key constituents. Finally, we

worked with Congressman Mike Conaway (R-

TX) to introduce House Resolution 702, which

supports private equity and the existing tax

treatment of carried interest. Thirty-three House

Members joined with Congressman Conaway

as cosponsors of the resolution. Our campaign

had many successes and will continue to

provide assistance in 2015 and beyond.

INTEREST DEDUCTIBILITY

The wisdom of the Council’s long-term

proactive efforts to thwart misguided

attempts to limit interest deductibility

was demonstrated in 2014. Our two-year

preemptive campaign with the BUILD

coalition helped to prevent Chairman Camp

from including limits on interest deductibility

in his tax reform proposal. While this was

an important incremental victory for the

Council, the battle to maintain full interest

33HOUSE MEMBERS

JOINED THE CONAWAY

RESOLUTION AS

COSPONSORS

7

2

STATE

GRASSROOTS

CAMPAIGN

CONSECUTIVE

YEARS OF HR 1105

PASSAGE IN

THE HOUSE


“THE WISDOM OF THE COUNCIL’S LONG-TERM PROACTIVE EFFORTS TO THWART MISGUIDED ATTEMPTS TO LIMIT INTEREST DEDUCTIBILITY WAS DEMONSTRATED IN 2014.” deductibility is far from over, and our efforts

with the BUILD Coalition to protect this

important business expense will continue

in 2015.

REGISTRATION RELIEF LEGISLATION In 2014, the Council had great success

advancing bipartisan legislation to remove

unnecessary regulatory burdens imposed

on private equity by the Dodd-Frank Act.

For the second consecutive year, the Small

Business Capital Access and Job Preservation

Act (H.R. 1105) passed the full House of

Representatives. The Government Affairs

department will continue its focus on this

important issue in 2015 with the intent

of passing the legislation in both chambers

of Congress.

LOOKING AHEADThe Government Affairs department

will be just as active in 2015 on issues of

importance to our industry. While the new

Republican majority in the Senate and the

expanded Republican majority in the House

are positive for our interests, it is important

to remember that this is a very new and

different Congress, which includes many new

members who may not know much about

private equity yet and who have never voted

on our key issues before. Consequently, the

Government Affairs department cannot take

any Member of either party for granted. The

same logic is true in the regulatory arena –

we cannot take anything for granted. 2015

will be a robust year for education and

advocacy for the private equity industry on

Capitol Hill and beyond.

11 COMMENT LETTERS FILED

BY THE COUNCIL WITH

MULTIPLE AGENCIES

AROUND THE WORLD

Interest Deductibi l i ty: A Bui lding Block for Growth


MEMBERSHIP SERVICES ARE FUNDAMENTAL

TO MEMBER-BASED ORGANIZATIONS,

ESPECIALLY TRADE ASSOCIATIONS, AND

SINCE OUR INCEPTION IN 2007, THE PEGCC

HAS BEEN COMMITTED TO PROVIDING OUR

MEMBERS WITH QUALITY SUPPORT AND

PROGRAMS. Our new member services offerings

create more opportunities for members to engage

with the Council, and directly improve the Council’s

ability to be at the forefront of our legislative,

regulatory, and public affairs advocacy work.

These new initiatives also provide members with

increased value by expanding their network and

pool of resources.

MEMBERSHIP SERVICES

2014 HIGHLIGHTSThe Council achieved many notable

accomplishments in Membership Services in 2014:

EXPANSION OF MEMBER SERVICES

Activity levels for Committees, non-Committee

events, and member calls continued to

increase in 2014 with a total of 27 non-

governance member functions during the year.

PEGCC Committees continued to be highly

engaged, particularly the groups for Chief

Compliance Officers, Chief Financial Officers,

General Counsels, and Investor Relations

Professionals.

The Council’s expansion of non-Committee

member events included several new initiatives:

■■ Chief Financial Officers’ Annual

Meeting – Held on September 10th, the

Council’s inaugural CFOs’ Day was

well attended and featured engaging

dialogues between panelists and

attendees. The agenda featured a lunch

discussion on cyber risk, and moved to

panel discussions on the evolution of

the private equity industry, IT systems

and cybersecurity, and developments

in regulation and taxation. Area

experts from the Council’s Associate

Membership were featured on each

panel. The event was followed by a

cocktail reception hosted by Deloitte.

■■ ESG Seminars – A new educational

series on environmental, social and

governance (ESG) programs began with

a seminar on May 22nd, and focused on

topics including effective messaging

and reporting to LPs, determining

your firm’s approach to ESG, and ESG

integration in portfolio management.

The second seminar, held on November

18th, took a deeper look at the “E” of

ESG, and featured a discussion on

the Environmental Defense Fund’s

Climate Corps program. Panelists

featured at these seminars included

PEGCC member firm sustainability

professionals, as well as Associate

Member and third-party NGO experts.

■■ Young Professionals Network (YPN)

Reception – The YPN is a new initiative

at the Council intended to bring together

the under 40 rising stars of the industry.

This exciting addition to the Council’s

member services was developed in

order to provide younger members of

the PE community with opportunities to

interact with peers at other firms, learn

from distinguished industry leaders and

experts, and engage directly with the

Council. The first YPN reception was

held on December 10th in New York and

featured Marc Becker, Senior Partner

at Apollo, as the event speaker. In the

future, events will be held in Boston,

Chicago, and San Francisco, in addition

to New York.

" PEGCC Committees continued to be highly engaged, particularly the groups for Chief Compliance Officers, Chief Financial Officers, General Counsels, and Investor Relations Professionals. "


A conversation with Dr. Ben Bernanke moderated by David Rubenstein (The Carlyle Group) at our Annual Member Dinner.

ANNUAL MEETING & MEMBER DINNER

A notable highlight for 2014 was another

successful Annual Meeting and Member

Dinner, held June 11-12 at The St. Regis

Washington DC. The event kicked off with

the Member Dinner, featuring an enlightening

conversation between David Rubenstein of

The Carlyle Group and Dr. Ben Bernanke.

The Annual Meeting included sessions with

political analyst Stu Rothenberg, then-Senate

Minority Leader Mitch McConnell (R-KY),

House Minority Whip Steny Hoyer (D-MD),

Deputy Secretary of the Treasury Sarah

Bloom Raskin, and a keynote address by

PEGCC President and CEO Steve Judge.

CONTINUED MEMBERSHIP GROWTH

Membership expansion was a core objective

for the Council in 2014. In addition to private

equity and growth capital outreach, we

established a new PEGCC Fund of Funds

Member class. The details of this membership

program were determined during the

second quarter of the year, and outreach

to highly regarded funds of funds began

in early summer. During the course of the

year, we were pleased to welcome Adams

Street Partners, HarbourVest Partners, and

Pantheon Ventures to our new Member class.

Private Equity and Associate Member

outreach continued as well and we were

excited to welcome another seven members

into the PEGCC community. Bertram

Capital and Clearlake Capital joined as new

private equity members. We expanded our

Associate Member base with the additions of

Deloitte, EY, KPMG, Proskauer, and PwC.

LOOKING AHEAD

We plan to increase our outreach to

prospective members in the upcoming year.

It is our goal to welcome additional well-

regarded private equity, growth capital, and

fund of funds firms to the Council, while

providing our current members with the best

membership experience possible. We will

build on the successful initiatives launched in

2014, and add new features to our event line-

up in 2015. Members can expect a robust

offering of in-person events, member calls,

and the continual support of the Council

throughout the year.

“MEMBERSHIP EXPANSION WAS A CORE OBJECTIVE FOR THE COUNCIL IN 2014.”

10 NEW MEMBERS JOINED

THE PEGCC IN 2014

3 NEW NON-COMMITTEE

MEMBER INITIATIVES

27

EVENTS AND

MEMBER CALLS


FROM THE BEGINNING OF 2014, THE PUBLIC

AFFAIRS DEPARTMENT WAS PRESENTED

WITH A NUMBER OF CHALLENGES. House Ways

and Means Committee Chairman Dave Camp (R-MI)

released a tax reform proposal that threatened long-

standing policies important to the private equity model.

The Council was prepared and set to work to protect

the industry. Using innovative campaigns and research-

based communication practices, the PEGCC created a

strong, unified voice for private equity, and was able to

deliver significant results for the industry in 2014.

PUBLIC AFFAIRS

CARRIED INTEREST “CHAMPIONS” The Council carried out a six-month, seven-

state grasstops effort to identify Members

of Congress willing to be public about their

support of carried interest and publicly

traded partnerships. The highly successful

Carried Interest Champions campaign

mobilized in-state, influential supporters and

coalitions to communicate with targeted

Members of Congress and their key staff

members. As a result, 47 Members of

Congress publicly stated their support for

private equity and current law treatment of

carried interest, and the campaign assisted

in our effort to add co-sponsors to Rep. Mike

Conaway’s (R-TX) House Resolution 702 - a

Resolution that reaffirms several key points:

private equity plays an important role in

growing and strengthening U.S. businesses,

carried interest is a capital gain, and private

equity should be treated no differently than

other asset classes.

NEW EDUCATIONAL VIDEOS Video case studies are a compelling way

to tell the private equity story, and they

remain a core component of our Private

Equity at Work campaign. In 2014, the PEGCC

produced an educational video series, and

video case studies showcasing portfolio

companies of KKR and The Riverside Company.

■■ Private Equity Minute: To explain the

basics, the Council produced Private Equity

Minute, a six-part video series featuring

Dartmouth College’s Tuck School of

Business professor Colin Blaydon. The

series is a primer on the private equity

model and how value is created for private

equity-backed companies.

■■ Gardner Denver Case Study: KKR’s

management of portfolio company

Gardner Denver shows how private

equity can benefit both a company

and a community. Under KKR’s

management, Gardner Denver built

a $1.65 million flood retention wall

along a portion of the Mississippi

River to protect both its facility and

parts of Quincy, Illinois. As part of

this project, the PEGCC coordinated

a commemorative ribbon cutting

ceremony with Gardner Denver’s CEO

and local elected officials.

■■ ECN Case Study: In partnership with

The Riverside Company, the PEGCC

captured the story of Florida-based

Emergency Communications Network

(ECN), a high-speed outbound

notification service that sends alerts to

affected communities when disasters

strike. With help from Riverside, ECN

was able to expand their footprint

across the country and provide new

innovative solutions for emergency

communications.

MOBILIZING PORTFOLIO COMPANIES The Public Affairs team facilitated 47

portfolio company visits with Members of

Congress this year through our Portfolio

Private Equity Minute: Chapter 1 - Private Equity Basics

Private Equity at Work: Gardner Denver & KKR

Private Equity at Work Success Stories: ECN & The Riverside Company


“THE PUBLIC AFFAIRS TEAM FACILITATED 47 PORTFOLIO COMPANY VISITS WITH MEMBERS OF CONGRESS THIS YEAR THROUGH OUR PORTFOLIO COMPANY INITIATIVE.”Company Initiative. In only its fourth year, our

Initiative is a critical buttress for the Council’s

lobbying and Congressional outreach efforts

and has generated over 200 portfolio

company visits. New companies have already

been identified to expand the Initiative in

early 2015.

The PEGCC also brought portfolio company

CEOs to Washington. We facilitated

numerous Capitol Hill meetings for CEOs

from Riverside portfolio companies’

Brandmuscle, Arcos, ECN, and Camelot

Education, TPG portfolio company ProSight

Specialty Insurance, Apollo portfolio

company Berry Plastics, and Providence

portfolio company Ironman.

MEDIA OUTREACHIn leveraging our educational video

series, industry surveys, and infographics

highlighting new and timely research data,

the PEGCC’s proactive and innovative

approach to driving earned media resulted

in 230 stories in 2014. The year was marked

by high-profile regulatory stories, with

Leveraged Lending Guidance, monitoring

fees, limited partnership agreement

confidentiality, carried interest, and other

issues being covered. Essential to the

Council’s success in having a strong presence

within these stories were our efforts to

maintain and build new relationships with

the press. Over 30 in-person briefings

were conducted in 2014, with financial and

political reporters from the New York Times

DealBook, Wall Street Journal, Buyouts,

Bloomberg, Pensions and Investments, Asset

TV, San Francisco Chronicle, Reuters, San Jose

Mercury, POLITICO, The Hill, and other outlets.

The Council’s research continues to illustrate

the value of private equity and earn

significant media coverage. Among other

reports, the PEGCC’s annual Public Pension

Fund Analysis and Private Equity Top States

over30

IN-PERSON MEDIA

BRIEFINGS WITH

FINANCIAL AND

POLITICAL REPORTERS

230 EARNED MEDIA

STORIES



From Left to Right – Jeffrey Ansell, President & CEO of Sun Products,

Congressman Brett Guthrie (R-KY), and Andy Riddick, Area Manager – Liquids

Packaging at Sun Products.

From Left to Right - Todd Bock, CEO of Camelot Education, Keith Davisson of The

Riverside Company, Phil Alexander, CEO of Brandmuscle, Bruce Duff, CEO of Arcos,

Dave DiGiacomo, CEO of ECN, and Graham Hearns of The Riverside Company.

TPG portfolio company ProSight Specialty Insurance visits Capitol Hill. From Left to

Right - Frank Papalia, General Counsel of ProSight Specialty Insurance, Congressman

Bill Foster (D-IL), and Joe Beneducci, CEO of ProSight Specialty Insurance.

Congressman Mike Quigley (D-IL) speaks with students at Camelot Education’s

Excel Academy of Englewood in Chicago, IL. Camelot Education is a portfolio

company of The Riverside Company.

Private Equity Pushes Back

PEGCC chairman Ken Mehlman talks tax proposals, proposed

compensation rules

PE still beating stocks: Report

Confidentiality of limited partnership agreements is paramount

Private Equity Investment Boosts The Economy: Here’s How Your

Retirement’s At Play

Private equity investments helping public pensions

Texas comes out on top in private equity investments

SAMPLE EARNED MEDIA FOR 2014

Private equity’s contribution to strengthening a pension fund


and Districts garnered over 50 local and

national earned media stories.

PRIVATE EQUITY DECISION MAKERS SURVEY In 2014, the PEGCC launched the Private

Equity Decision Makers Survey, a biannual

poll of over 100 private equity professionals

to find out what they think about industry

trends and the general economic outlook.

Decision makers ranked what they think

the best sectors were for future investment

opportunities and provided their expectations

for the S&P 500. For both polls, over 4,000

PEGCC member and non-member private

equity professionals received the results, and

The Wall Street Journal, Bloomberg, POLITICO’s

Morning Money, and numerous other outlets

published the findings.

SOCIAL MEDIA PRESENCE The PEGCC has built a robust social media

presence to continue the private equity

conversation online. Many national and local

reporters, as well as Members of Congress,

are active on social media, and the PEGCC’s

social media channels now serve as a go-

to resource. As of the end of 2014, the

Council’s Twitter page (@PEGCCouncil) had

2,525 followers, a 40 percent increase from

last year. PEGCC tweets are often retweeted

by industry stakeholders including private

equity executives, portfolio company CEOs

and journalists. The PEGCC shares photos,

videos, and updates on its Facebook page,

which now has 3,472 “likes”. The PEGCC

also continues to share information on its

YouTube and LinkedIn pages. If you haven’t

already connected with us online, we hope

you’ll take a few moments to do so soon.

LOOKING AHEAD

As a new Congress takes up the debate

on tax reform, the Council renews its

commitment to clarify and uphold the

positions of the private equity industry. We

are ready to serve as the leading resource

for accurate and insightful commentary

on industry trends, tax-related issues, and

generating proactive content to help educate

both the media and Members of Congress

on the vital role private equity plays in our

nation’s economy. 2015 promises to bring

challenges from both Capitol Hill and the

media, but the PEGCC will make certain that

both the reputation and the policies of the

private equity industry are defended.

“READY TO SERVE AS THE LEADING RESOURCE FOR ACCURATE AND INSIGHT- FUL COMMENTARY ON INDUSTRY TRENDS.”

2,525 TWITTER FOLLOWERS

3,472 FACEBOOK LIKES


THE PEGCC RESEARCH DEPARTMENT PLAYS

A CRITICAL ROLE IN ILLUSTRATING HOW

PRIVATE EQUITY PROVIDES FINANCIAL

BENEFITS TO ITS INVESTORS AND SPURS

GROWTH IN THE AMERICAN ECONOMY.

Our studies provide the foundation for the advocacy

of policies that encourage private equity investment.

In 2014, research produced by the Council highlighted

the role that private equity plays in strengthening

retirements for millions of public employees and

growing businesses in local communities.

RESEARCH

The Research team also actively contributes

to the knowledge leadership of the private

equity industry. In 2014, Bronwyn Bailey, VP

of Research, spoke at 10 separate events on

topics ranging from ESG to regulatory issues

to fund returns. In January, she participated in

a panel discussing “A View from Washington”

at the PEI CFO/COO Conference, and in June,

she presented original PEGCC analysis on

investment performance of public pension

funds at the SuperReturn conference.

RESEARCH ACTIVITIES IN 2014Below is a selection of the research the

PEGCC conducted in 2014.

PUBLIC PENSION FUND ANALYSIS

Private equity provides a financial benefit

to public pension funds and improves

retirement security.

■■ The third annual Public Pension Fund

Analysis found that private equity

outperforms other asset classes. The

median pension fund generated an

annualized 12.3 percent return from

private equity investments over 10

years, compared to 7.9 percent from

public equity and 6.6 percent from fixed

income investments during the same

period.

■■ This study ranked the top 10 public

pensions by private equity investment

performance. The Teacher Retirement

System of Texas was the top pension,

receiving an 18.2 percent annualized

return from private equity over the

past 10 years.

■■ This study marked a new partnership

between the PEGCC and Bison, a

financial technology company that

helped to provide financial information

for the 153 public pension funds used in

our analysis.

INVESTMENT IN STATES AND DISTRICTS

Private equity is important to the economic

growth of local communities. The fourth

annual Private Equity: Top States and Districts

report highlights the top 20 U.S. states and

congressional districts receiving private

equity investment in 2013.

■■ The top ranked states were Texas and

California, receiving $87 billion and

$54 billion in private equity investment,

respectively. Texas’ 31st Congressional

District was ranked first among districts,

with its companies receiving $25.9

billion in private equity investment in

2013.

■■ This study helps to educate

congressional members about the

relevance of private equity to their local

economy and constituents, illuminating

the diverse industries and regions that

receive investment from the industry.

■■ The interactive U.S. map on the

website Private Equity at Work in

Your State allows users to learn about

"The Private Equity: Top States and Districts report helps to educate congressional members about the relevance of private equity to their local economy and constituents. "

12.3% PRIVATE EQUITY RETURN

TO MEDIAN PENSION

FUNDS, NET OF FEES


“THE AUDIENCE FOR PEGCC ANALYSIS INCLUDES PRIVATE EQUITY PROFESSIONALS, POLICYMAKERS, AND INDUSTRY OBSERVERS.”

private equity’s investment in their

states as well as their public pensions’

investments in private equity.

PRIVATE EQUITY TRENDS & PERFORMANCE The Research team tracks fundamental

trends in the private equity industry as well

as the performance of fund investments

through its quarterly reports.

■■ The quarterly PEGCC Trends Report

examines quarterly changes in key

industry activities, such as investments,

exits, and fundraising.

■■ The quarterly PEGCC Performance

Update analyzes the performance

of private equity compared to

public equity indices using financial

information from public pension funds

and private equity benchmark providers.

■■ These publications are widely used by

private equity fund managers, investors,

and their consultants.

THE RESULTSDesigned to educate the Council’s key audiences

and provide clarity for sometimes complex

concepts, the PEGCC’s research consistently

receives positive feedback from institutional

investors, industry thought leaders, elected

officials, and others. With featured articles

in national and regional news outlets, as well

as invitations to present original research at

investor conferences, the audience for PEGCC

analysis has grown to include private equity

professionals, policymakers, and industry

observers. The Public Affairs section of this

report details some of the media attention

received on the research produced by the

Council.

LOOKING AHEAD2015 will be an exciting year for the PEGCC

Research team. Several large studies and

policy papers are currently under way, and

the department has invested in technology

to boost our advocacy efforts with more

comprehensive information for targeted

audiences. The Council will continue its efforts

to communicate the valuable role the private

equity industry plays in the American economy.

$87B PRIVATE EQUITY

INVESTMENT RECEIVED

BY TEXAS IN 2013

18.2% ANNUALIZED RETURN

FOR PRIVATE EQUITY

OVER THE PAST 10

YEARS BY TEACHERS

RETIREMENT SYSTEM

OF TEXAS



Bronwyn Bailey, VP of Research at the PEGCC, and Pam Hendrickson, Chief Operating Officer at The Riverside Company, lead a discussion at the 2014 Private Equity International (PEI) Conference. Photo courtesy of PEI Media.

2014 MEMBERSHIPOUR MEMBERS

ACON Investments

Adams Street Partners

American Securities

Apollo Global Management

ArcLight Capital Partners

Bertram Capital Management

Brockway Moran & Partners

The Blackstone Group

The Carlyle Group

CCMP Capital Advisors

Clearlake Capital Group

Crestview Partners

The Edgewater Funds

Genstar Capital

GTCR

HarbourVest Partners

Hellman & Friedman

Irving Place Capital

The Jordan Company

Kelso & Company

Kohlberg Kravis Roberts & Co.

KPS Capital Partners

Madison Dearborn Partners

New Mountain Capital

Pantheon Ventures

Providence Equity Partners

The Riverside Company

Silver Lake Partners

Sterling Partners

TA Associates

Thoma Bravo

TPG Capital

Vector Capital

Vestar Capital Partners

Welsh, Carson, Anderson & Stowe

ASSOCIATE MEMBERS

T I E R 1

Cleary Gottlieb Steen & Hamilton

Debevoise & Plimpton

Deloitte

Kirkland & Ellis

Latham & Watkins

Paul, Weiss, Rifkind, Wharton & Garrison

Ropes & Gray

T I E R 2

EY

KPMG

Proskauer

PwC

Vinson & Elkins

T I E R 3

Sidley Austin

Simpson Thacher & Bartlett

Sullivan & Cromwell



Steve Judge speaks with Brian Conway (middle) and Michael Berk (right) of TA Associates during our Annual Member Meeting.

799 9th Street NW, Suite 200 | Washington, DC 20001

Phone: (202) 465-7700 | Email: [email protected]

Follow us at @PEGCCouncil

Visit us at www.pegcc.org and www.privateequityatwork.com

Pegcc annual report_8.25x8.25_022615a_single

Economy & Finance

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