The Story:
The Republican Party in Virginia, in a highly unusual Covid-era drive-through nominating convention, chose Glenn Youngkin as its candidate for Governor. Youngkin was for three years (2017 – 2020) the co-CEO of The Carlyle Group, a giant and influential private equity investment manager.
Background:
In making this transition from private equity to gubernatorial politics, Youngkin is following in the footsteps of Mitt Romney, who was the head of Bain Capital before running (successfully) for Governor of Massachusetts and still later (unsuccessfully) for President of the United States.
PE firms often find themselves in the thick of public controversy, because their business model can involve buying control of private companies and making changes in the structure or operations of those companies, seeking to enhance their value. Those changes have costs: customers may lose the services they’d come to expect from particular providers, and workers lose jobs.
The Thing to Know:
The PE industry of course maintains that it does more good than harm for the public welfare. Unfortunately, the costs of its activities are highly visible and the benefits are less so. Romney made this case as best he could in his political campaigns, and Youngkin will likely have to make the same point in the autumn campaign.
