The encounter is expected to be nothing short of gladiatorial. Today the great and the good (or bad, depending on your viewpoint) of private equity will come face to face with their British detractors and hostile MPs at the latest round of the Treasury committee hearings on the industry.
On the agenda for a grilling are executives from Permira, KKR, 3i, Carlyle and Blackstone - while up first are representatives from the Unite and GMB unions.
The central issue is purportedly tax. But the central attraction in what Lombard calls a “three-ring buy-out circus” may become who can land the bloodiest blow in this verbal conflict. Will the private equity heavyweights fare any better than the poor old BVCA managed last week?
Lombard draws comparison with the US Senate’s 1933 hearing, which grilled the most powerful financiers of the day. Thank goodness, it goes on, the parallels are inexact.
“Whereas the US hearings followed a financial cataclysm and highlighted the ways in which ordinary investors had been fleeced, MPs are trying to whip up national concern at a time of relative prosperity, to which private equity firms are contributing and in which ordinary investors and savers are participating, through unit trust and pension schemes’ stakes in private equity funds.”
All very well. But the rest of the media are baying for blood.
Polly Toynbee, in Tuesday’s Guardian, screeches “Stick it to these City caesars - for the sake of the nation.”
“Watch the clash between the power of capital and the rights of democracy, between tax fairness and free markets,” it goes on, pointing out that the private equity execs may provide a tougher challenge than the BVCA. “But the committee may have one advantage: City caesars are not used to challenge or contradiction. Up in their glass towers, rulers of both public and private companies are surrounded by obsequious courtiers in a world far removed from the rough and tumble of politics,” she adds.
The Independent is similarly outraged. “One rule for the super-rich, but another for everyone else,” thunders the strapline on their lead story. “Today will see the latest phase in a ferocious row breaking out over the privileges of a select group of multi-millionaires who dominate the financial affairs of London.”
The Daily Mail meanwhile is in more gloating form. “They are used to being treated as City royalty, but Britain’s top private equity bosses may feel more like chastened schoolboys as they file into today’s Treasury Select Committee hearing.”
Sam Fleming concludes: “The global elite are flocking to Britain and watching their wealth soar, while many ordinary families see their incomes stagnate as the tax burden ratchets upwards. Against that background, many MPs would sorely like to make an example of someone. Private equity tycoons, caught like sixth formers smoking by the bike sheds, are an easy target.”
The show kicks off at 2.30.
