Buzz Archive:
PE Buzz: A PE-rfect union

by Joseph W. Bartlett, Founder of VC Experts.com, 8/23/2007

The extraordinary success of the managers of private equity funds has provoked controversy in the United States.

A major issue has to do with the entitlement of labor unions to sit at the table when a buyout is negotiated. The unions argue egregious returns are being achieved on the backs of the target's rank and file, who have no voice in the process.

In an interview with Andy Stern of the Service Employees International Union in The Wall Street Journal on May 30, Stern said that the SEIU wants to "engage ... the buyout kings," with whom he "much prefers working" versus "their public company counterparts."

The verb "engage" needs definition. What exactly does the union have in mind? The answer is contained in a formal SEIU study, "Behind the Buyouts: Inside the World of Private Equity".