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Private equity groups are no longer “untouchable” in the new economic territory they have created, UNI General Secretary Philip Jennings has told the influential US magazine Business Week. In a two-page feature he told Business Week readers “we’re trying to put private equity on a new path when it comes to the way they treat their employees - who number in the millions”. It’s publication coincides with a growing public debate on the role of private equity and moves in the United States and Europe to close tax loopholes that have both fuelled the buyout boom and helped make a small number of PE capitalists into billionaires.

The magazine acknowledges that UNI’s General Secretary is “one of the loudest and most articulate voices being raised” in the private equity debate - a debate boosted by the first union conference on PE issues in Nyon last November and sponsored by global unions UNI, IMF and IUF.



“Private equity is not used to being challenged or contradicted and we think the time has come for a real public debate about the direction of private equity, what it means to economies, to financial stability and to the kind of societies that we’re trying to build,” he told interviewer Maria Bartiromo.

“We’re making it our business that this discussion takes place around the world, Private equity people feel that they’re untouchable, that they’re beyond the democratic process.”



Private equity groups have been criticised for sacking workers, for loading their takeover victims with debt and high “management” fees. They represent a step backwards in the campaign for Corporate Social Responsibility that has been making progress in public companies in recent years.

And the private equity groups are notoriously reluctant to involve unions in dialogue as they shake the financial dice that decide the fate of millions of workers.



Private equity was best known for seeding new enterprises with start up capital but they have found buying established public companies far more profitable with $4 trillion of deals last year.

“They can buy any publicly quoted company in the world. This is not business as usual,” says Philip Jennings in the interview. “That is why regulators are beginning to express profound concerns. What happens when one of these companies goes belly up? You have a systemic risk problem.”



Philip Jennings has met a number of the big private equity players on both sides of the Atlantic since focusing media attention on the problems of private equity in an address to the World Economic Forum in Davos, Switzerland in January. They include the US private equity giant Blackstone - headed by Steve Schwarzman. I think the Steve Schwarzmans of this world and the new business elite have to think deeply about the political ramifications of the inequalities we are seeking. That’s what’s missing in the private equity equation. This is not about envy, but it is about greed,” he told Business Week.



Asked to name the greediest private equity firm, Philip spotlighted Permira in Britain as coming in for particular criticism. “But if you scratch the surface, there are problems with each of them.”

And he appealed to union nominees on pension funds to take a closer look at investment strategies that have poured billions of dollars into PE buyouts. “We want pension funds to say: ‘look, if we’re going to invest this money in you, you have to make a new compact with the people in the businesses where your investment is going’.”