Private equity is a crucial driver of growth for the American economy and makes long-term investments in businesses looking to grow and expand. The American Investment Council recently released a new ad explaining how private equity firms make responsible, long-term investments in businesses and help them grow over several years. The 30-second digital ad, which ran in POLITICO’s Playbook newsletter, starts by posing the question, “What is your five-year plan?” — a question that private equity firms hear often while working with businesses nationwide.
The ad continues:
“In fact, thousands of companies across America turn to private equity firms each year for help with their five-year plan. We invest capital, provide management expertise, and improve operational capabilities over the long term to improve companies and create jobs. In fact, our long-term investments are usually between four to seven years. We invest in real businesses, real people, and real communities for the long haul.”
Despite the economic uncertainty caused by COVID-19, private equity continued to make long-term commitments to businesses and workers across the country.
- Private equity directly employs 8.8 million Americans across all fifty states. Altogether, private equity supports 5 percent of the country’s GDP and has a total economic impact above $1.1 trillion.
- In 2020, private equity invested $561 billion in over 4,300 companies in the U.S., 2,100 of which were small businesses with fewer than 500 employees.
“Most Americans probably don’t realize the positive impact private equity has had on their lives — particularly in the past year,” said Drew Maloney, President & CEO of the American Investment Council. “Private equity investors apply capital and their industry expertise to grow many of the companies we know and love — as well as the companies we may not know by name, but improve our daily lives. Throughout the last year, private equity saved thousands of jobs and helped companies in hard-hit industries weather the economic crisis, such as restaurants, travel & hospitality, manufacturing and more. The role of private equity has never been more critical.”
Private equity firms have helped thousands of companies like Black Rock Coffee, Ingersoll Rand, Signify and Victory Innovations with five-year plans. The industry has a positive impact on several key sectors and areas, including:
- Pensions: Private equity investments are consistently the best-returning asset class for pension funds over the long term – delivering returns of over 13.7% – and supporting the retirements of schoolteachers, first-responders, and other dedicated public servants.
- Renewable Energy: Private equity firms are one of the largest sources of funding for sustainable energy companies and green jobs nationwide. Private equity invested more than $11 billion in wind, solar, and other renewable energy projects in 2020, nearly double the investments made in 2019.
- Health Care: Private equity firms provided capital to health care companies and hospitals combatting the COVID-19 pandemic and supported the development and processing of a robust antibody test, COVID-19 testing, and vaccines and treatments.
To learn more, please visit https://www.investmentcouncil.org/.