It’s a private equity world out there

There are traces of private equity in seemingly almost every detail of our daily lives. Some of us will wake to KKR-owned Sealy mattress, while others will prefer the rather well-used Simmons (it has been sold seven times in the past two decades with many owners to be in the private equity space).

For those of you that travel frequently, it is highly like that your suitcase is made by a private equity-backed company (Samsonite is owned by CVC, while Tumi is owned by Doughty Hanson). While not many Asian airlines (mostly the budget ones such as AirAsia) are owned by private equity funds, several airport management companies and the services they provide are all owned by private equity firms.

Really in this time and age, we are subjected to a never ending list of private equity-backed products that cater to our every needs and whim. This should be great news for investors. That is true private equity is at work, extracting maximum value from their investments and the brands. The fact that we are seeing, buying and using private equity backed products are a testament that the industry knows what is doing. Returns on many of these investments will no doubt very lucrative.

With great power comes great responsibility. With such visibility in its actions, private equity firms are in a unique position to be responsible to not only the employees and the consumers of the companies they own, but to the rest of its peers the private equity industry and the companies they own. As an industry, we are in this together and much as we can tell the difference between each firm's individual team and strategy, the public classifies all of those involved in the industry under the same category.

Therefore as the industry grows, the need to confront issues of corporate responsibility and corporate governance becomes stronger. Investments should not only make investors money but also provide a positive impact to the employees who make the product as well as, the end use. This has tremendous impact for those in the industry and the leaders, such as the Carlyle Group, has announced plans earlier this year to develop a set of metrics to measure the environmental, social and governance (ESG) performance of its portfolio companies.

Carlyle is worth highlighting as it is at the forefront of a trend among private equity funds to adopt responsible investment principles. It publishes a 32-page corporate responsibility report detailing a number of initiatives it has undertaken, including the development in 2008, with the Private Equity Growth Council, of Guidelines for Responsible Investment.

Other firms should also embrace this opportunity to push initiatives on their own and show the world in their belief that being a good corporate citizen is not only good business practice, but also is able to create plenty of long-term value for investors.

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• Topics
• GPs
• KKR
• The Carlyle Group
• CVC Capital Partners