Ken Mehlman: Private Equity – Kinder and Gentler?

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Ken Mehlman talks about how private equity has changed at Kohlberg Kravis Roberts (KKR) and what they have done to do that.

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Ken Mehlman: Private Equity – Kinder and Gentler?

  1. 1. Ken Mehlman: PrivateEquity – Kinder andGentler?Ken Mehlman on CNN MoneyBy Dan Primack November 8, 2012: 5:00 AM ET
  2. 2. Mitt Romneys candidacy put his former profession in the spotlight. KKRS Ken Mehlmanis trying to make sure the industry doesnt get burned.FORTUNE -- Ken Mehlman isnt a private equity investor, but he has been one of theindustrys most influential figures this year. As global head of public affairs for KohlbergKravis Roberts & Co. (KKR), Mehlman has spearheaded a campaign to defend his firmand its peers from attacks that have resulted from Mitt Romneys presidentialcandidacy."Private equity is no longer private," Mehlman quips in an interview.Indeed, for the past year firms such as Bain Capital, which Romney co-founded, havebeen very much in the public eye, portrayed in ads and remarks by President BarackObamas campaign (and earlier, by Romneys GOP rivals) as job-slashing, greedmonsters.As the former head of the Republican National Committee and a campaign managerfor President George W. Bush, Mehlman is particularly qualified to help financiers shapetheir message in an election year. Mehlmans main talking point? Private equity firmstake the kind of bold financial risks that strengthen businesses in ways that benefit theAmerican economy. "You cant invest in large businesses around the world todayunless you are willing to help provide a thorough understanding of who you reallyare, and engage around issues that affect things like the environment, workers, andlocal communities," Mehlman explains.
  3. 3. It hasnt been an easy sell. For starters, the men and women who run private equity firms arenotoriously guarded; they dont like talking to the media about anything, let alone about howtheir operations really work. Even Romney shied away from discussing specifics of Bainsinvestments.Mehlmans strategy has been to work through the Private EquityGrowth Capital Council, a trade group formed in 2006, to spreadthe word.In its early years, PEGCC was considered so ineffective that someof its earliest member firms bailed (including Bain Capital), and itsfounding CEO was sacked in the summer of 2011. Since then, thegroup has sprinted to relevance -- publishing data, putting outpapers explaining private equitys relationship with public pensions,and even producing a video series about private equity-backedcompanies.And its Mehlman who is widely credited with the groups new strategic direction, along withfellow PEGCC board member David Marchick (a former Clinton Administration official who nowruns external relations for The Carlyle Group)."Ken, and maybe to a bit of a lesser extent David, recognized early that we all had a lot atstake if Romney was the nominee," explains a senior private equity executive. "Theyve reallyput in place something that we probably should have had long before this."
  4. 4. Mehlman, of course, defers praise to others, including new PEGCC CEO Steve Judge andcommunications chief Ken Spain (a former National Republican Congressional Committeespokesman). But the initial vision mostly was Mehlmans, with Judge and Spain deftly workingout the details and translating it into action.Private equity executives will long remember 2012 as the year in which they were reluctantlythrust into the public spotlight. And they will remember that Ken Mehlman helped keep theunwelcome glare from burning too badly.A shorter version of this story appeared in the November 12, 2012 issue of Fortune.

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