Private Equity Guy Mounts Brave Defense of Private Equity

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It's like he's being crucified.Photo: istockphoto

Paul S. Levy runs a private equity firm that is, in his own words, "small potatoes," managing a mere $4 billion or so. But he's decided to display outsize courage. Levy bravely spoke to Dealbook's Andrew Ross Sorkin about the challenges of being hated for his career in the era of Mitt Romney's Bain-blighted presidential run. It's the perfect post-MLK Day read: Don't judge this man by the color of his money!

Levy, who's not actually much of a Romney fan, is puzzled by the reticence of other oppressed private equity executives to defend the way they make their living. “There’s a tinge of McCarthyism here,” Levy told Sorkin. “I think it’s a pretty honorable industry, and I don’t know why people aren’t stepping up and defending the careers that define their lives. That’s a sad thing. What do they fear it will cost them?”

It's not that Levy doesn't understand what turns people off from private equity. But he's got a considered defense. Perfection is impossible!

Of course, the biggest criticism of private equity firms is that they sometimes lard companies up with so much debt that it pushes them into bankruptcy — meanwhile having already taken money out of the business for themselves, effectively rewarding their own failure.

“Not everybody is perfect; we’ve had our mistakes as well, but I don’t think there’s a predatory attitude in doing these deals,” Mr. Levy said.

Sorkin, for his part, is fairly gleeful at having gotten one of these guys on the record. "Over the past several weeks, anytime my colleagues or I have sought comment about attacks on the industry, private equity’s kingpins have declined, " he explains, and mourns that "The voices that could pierce the clamor ... have remained silent." But luckily, while Levy might not fit the description of "kingpin," he lunches with kingpins sometimes. (He's pals and/or working acquaintances with big names like Leon Black and David Rubenstein.) And after this article, Levy's own name recognition will probably increase.