4. PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 4
WHO WE ARE
Established 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 DO
The 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 EQUITY
Private 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.
5. 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.
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 5
6. 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
pressureon
theindustry
increased.In
2014,wefiled
11 comment
letterswith
multiple
agenciesinthe
UnitedStates
andaroundthe
world."
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 6
7. 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
8. REGULATORY POLICY
The 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
3COMMENT LETTERS
SUBMITTED TO THE CFTC
ON AGGREGATION
15LEADING LAW FIRMS
SIGNED OUR CONSENSUS
INTERPRETATION LETTER
ON THE VOLCKER RULE
4COMMENT LETTERS
SUBMITTED TO THE
GERMAN MINISTRY
OF FINANCE
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 8
9. 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
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 9
10. “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 AHEAD
The 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.
11COMMENT LETTERS FILED
BY THE COUNCIL WITH
MULTIPLE AGENCIES
AROUND THE WORLD
Interest Deductibility: A Building Block
for Growth
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 10
11. 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
12. 2014 HIGHLIGHTS
The 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
continuedtobe
highlyengaged,
particularly
thegroupsfor
ChiefCompliance
Officers,Chief
Financial
Officers,General
Counsels,
andInvestor
Relations
Professionals."
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 12
13. A conversation with Dr. Ben Bernanke moderated by David Rubenstein (The Carlyle Group) at our Annual Member Dinner.
14. 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.”
10NEW MEMBERS JOINED
THE PEGCC IN 2014
3NEW NON-COMMITTEE
MEMBER INITIATIVES
27EVENTS AND
MEMBER CALLS
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 14
15. 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
16. 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
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 16
17. “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 OUTREACH
In 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
over
30IN-PERSON MEDIA
BRIEFINGS WITH
FINANCIAL AND
POLITICAL REPORTERS
230EARNED MEDIA
STORIES
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 17
18. PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 18
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.
19. 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
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 19
20. 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.”
2,525TWITTER FOLLOWERS
3,472FACEBOOK LIKES
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 20
21. 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
22. 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 2014
Below 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
"ThePrivate
Equity:Top
Statesand
Districts
reporthelps
toeducate
congressional
members
aboutthe
relevanceof
privateequity
totheirlocal
economyand
constituents."
12.3%PRIVATE EQUITY RETURN
TO MEDIAN PENSION
FUNDS, NET OF FEES
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 22
23. “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 RESULTS
Designed 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 AHEAD
2015 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.
$87BPRIVATE 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
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 23
24. PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 24
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.
25. 2014 MEMBERSHIP
OUR 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
PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 25
26. PRIVATE EQUITY GROWTH CAPITAL COUNCIL | 2014 ANNUAL REPORT | PAGE 26
Steve Judge speaks with Brian Conway (middle) and Michael Berk (right) of TA Associates during our Annual Member Meeting.
27. 799 9th Street NW, Suite 200 | Washington, DC 20001
Phone: (202) 465-7700 | Email: info@pegcc.org
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Visit us at www.pegcc.org and www.privateequityatwork.com
