Just in case we were feeling that our earlier posts about private equity profiting from public policy sounded a tad, well, paranoid, Steve Schwarzman said a few reassuring words at that big private equity con-fab in Germany to reassure us that just because we're paranoid doesn't mean the private equity guys are making a bundle off market regulation and public (or media) pressure against executive compensation levels.
From DealBook's private equity conference dispatches:
The chairman of the private equity firm Blackstone Group sounded as if he wanted to send a big thank-you note to lawmakers and regulators on Tuesday. “Sometimes governmental reforms really work well for you, because they mess things up,” he told the audience at the Super Return conference. “We’re the beneficiaries of governmental reforms.”
For better (for buyout firms) or worse (for shareholders), Mr. Schwarzman suggested that under the current system, managers of public companies felt prohibited from making drastic changes that would, in the long-term, benefit the company’s investors.
He put it this way:
A C.E.O. will sit with you and say here are four major things I would have done if I didn’t have the regime that I currently have as a public company, and why don’t we do these right away. And, in a way, the public shareholders then complain that they didn’t get a fair value for the company, but if the C.E.O. did those individual actions, it would lead to his stock being depressed.
So, the public shareholder is getting what he deserves and we are, fortunately, the lucky people who are getting not perhaps what we deserve — but are indeed getting.