Private equity’s 2020 US election bets mostly pay off

Of the 10 top recipients of money from the private equity industry, eight won their races last week, based on data from the Center for Responsive Politics, a nonprofit that researches money in politics. This ranking excludes Democrat Pete Buttigieg, who received private-equity support during his presidential primary run but wasn’t on the 3 November ballot.

The list was topped by President-elect Joe Biden, who took in about $3.3m in direct contributions from employees of private equity and other investment firms, the most of any candidate. Biden has proposed to increase taxes on private equity managers and other high earners.

President Trump ranked ninth on the list, receiving slightly less than $467,000 from the industry, although political-action committees supporting him took in much more.

On Sunday, private equity’s largest trade and lobbying group, the American Investment Council, released a statement congratulating Biden, Vice President-elect Kamala Harris and the incoming members of Congress.

“The AIC team and our member firms look forward to working with the new administration and Congress to support struggling businesses across the country and help fuel the post-Covid economic recovery,” wrote the group’s chief executive, Drew Maloney.

While the private equity industry traditionally has shunned the limelight, it has ramped up its political spending in recent years, as politicians increasingly scrutinise the industry’s role in the US economy.

Based on political spending, the industry’s party preference alternates between Democrats and Republicans, but historically has been fairly balanced, based on data from the Center for Responsive Politics. Democrats have received 48% and Republicans 52% of the buyout industry’s spending in races dating back to 1990, the center’s data show.

In the 2020 campaigns, about 61% of the buyout industry’s direct contributions went to Democrats, according to the center. Employees of private equity and other investment firms have spent more than $170m on 2020 races, their highest sum ever.

While the industry preferred giving to Democrats overall, it favored Republicans in Senate races, the center’s data show. Four of the five Senate candidates receiving the most money from the industry won.

The top recipient, incumbent Republican Susan Collins of Maine, fended off a challenge from Democrat Sara Gideon after receiving more than $600,000 from private-equity employees. Independent groups supporting Collins received even more from the industry, with Blackstone Group Inc. co-founder Stephen Schwarzman alone giving $1.5m to a political action committee backing her, according to federal election records.

The second and third Senate candidates in terms of dollars spent by private equity are also Republican incumbents who won: John Cornyn of Texas and Majority Leader Mitch McConnell of Kentucky. The fourth-highest recipient, Democrat John Hickenlooper, defeated Republican Sen. Cory Gardner in Colorado. Gardner was the only recipient among the top five recipients to lose last week.

Among candidates for the House of Representatives, three of the top five recipients of cash from private equity won their races: Josh Gottheimer, Seth Moulton and Kevin McCarthy. The two among the top five who didn’t win their races were incumbent Max Rose (D., N.Y.) and Democrat Alan Khazei, who lost his primary bid for an open seat in Massachusetts.

Source: The Guardian