PRINT THIS PAGE Large buy-out investment boosts employment figures in US, PEC study finds18/01/2008. Source: AltAssets. 
Acquisitions of large companies by major US-based private equity firms between 2002 and 2005 resulted in significant net gains in US employment, according to a study published by the Private Equity Council. The most significant job gains were registered in the manufacturing sector, where US companies acquired by private equity firms posted an overall employment gain of 1.4 per cent, versus a loss of 7.7 per cent in the broader manufacturing sector.
The study, authored by Dr Robert J Shapiro, former Under Secretary of Commerce in the Clinton Administration and chairman of Sonecon, and Dr Nam D Pham, founder and president of NDP Group, is based on empirical data provided directly by private equity firms.
'The data show that large private equity transactions produce significantly greater job gains than observed in other companies in the same sectors, especially other large companies,' Dr Shapiro said. 'These findings reflect the role that private equity funds play in the economy: acquiring underperforming companies and reforming their operations.'
Douglas Lowenstein, president of the PEC, added, 'An important measure of each individual private equity investment is whether it helps a company grow and become more competitive in today's global economy. There are many measures of such benefits, including revenue and sales growth, capital expenditures, innovation and R&D investment, and, of course, employment. With respect to the latter, in some cases private equity investments may result in employment growth, in others, it may save endangered jobs, and in still other cases, it may mean job losses. But this study clearly suggests that, in the aggregate, private equity investment has a net positive effect on US employment growth.'
PEC members are Apax Partners, Apollo Global Management, Bain Capital Partners, The Blackstone Group, The Carlyle Group, Hellman and Friedman, Kohlberg Kravis Roberts & Co., Providence Equity Partners, Silver Lake Partners, THL Partners and TPG Capital.
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