When private equity gets political

Tang's backers include Antony Leung, The Blackstone Group's chairman for Greater China, who has publicly expressed his support. Clear minded readers will remember that Tang replaced Leung as the Hong Kong's financial secretary back in 2003 when the former banker left the same position. He joined Blackstone as a senior managing director in 2007.

Leung and a few of his peers - such as Lim Hwee Hua, who joined KKR earlier this year, and Finian Tan, who started Vickers - have made me think on whether or not former public servants make good private equity professionals. The answer is obviously yes. Like all jobs, those with relevant training and experience look to excel (Leung worked at Chase Manhattan and Citi before joining public service.) Perhaps the best and most successful example is David Rubenstein who, aged just 27 years of age, served as a domestic policy adviser to President Jimmy Carter.

With their ability to interact with people of all classes, impressive rolodexes and understanding (sometimes) of the issues, senior government officials can be ideally suited to maneuver the private equity space. A buyout deal is often as much about gauging the regulatory winds as it is finalizing complex financing structures.

By extension, do private equity professionals make good public servants? There are certainly plenty of examples to prove this point. Take Gita Wirjawan, former head of leading Indonesian GP Ancora Capital, who left the private equity firm to head the Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal). Wirjawan is now one of Indtonesia's high flying politicians; he was recently been appointed as Trade Minister and is tipped for even higher office.

With their ability to understand, interact and influence across the business spectrum, private equity professionals can make first class politicians, especially in areas related to finance, economics and innovation. While many will lack the experience of working the notoriously bureaucratic government system, the combination of a capacity to operate with different groups and resolve conflicts, the ability to call on the support of powerful friends, and a grasp of commercial issues may be exactly what many countries need.

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• Topics
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• The Blackstone Group
• Ancora Capital Management