Like any committed blogosopher desirous of planting my pearls of wisdom as broadly and deeply as possible in the Weltanschauung, I was initially delighted to have received the endorsement of my mentors at LoS. However, as I ruefully dumped my twenty-fifth dead rodent ($13.95 each, plus tax) into the trashbin this afternoon, the delphic utterance pictured at the top of this post popped into my head.
It is one of many such sayings perpetrated on an unsuspecting populace by (conceptual) artist Jenny Holzer. Ms Holzer came to fame in the late 1970s by pasting cheap broadsheets on tenement walls in New York's East Village—back when the primary spoken language in the East Village was still English and real artists actually lived there—and later moved on to granite tables and coffee mugs when her popularity improved. (So much for artistic integrity.) As she herself would (and did) say,
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Later, as I read the latest opinion piece in the Financial Times by John Gapper about how "Private equity needs more charm," it occurred to me that Ms Holzer presciently had a great deal to say about PE's current struggles with its image in the press and society at large.
I get the sense from many private equity types that they are surprised by all the negative attention they are receiving. Ms Holzer—and the press, politicos, and pundits currently busy fitting slings and arrows of outrageous fortune into their crossbows—are not:
ABUSE OF POWER COMES AS NO SURPRISE
Much of the battle for public opinion being waged over private equity takes a form with which most financial sponsors are by definition unfamiliar: it is a war of public relations, waged in nasty little backwaters over thorny social issues like income inequality, the proper relation of labor and capital, and political influence. This is not a war most private equity professionals are used to fighting, and as one might expect they are bringing the wrong weapons and the wrong soldiers to the fight.
Mr. Gapper's piece (subscription required) is instructive. He writes admiringly about TPG founder David Bonderman's public debate performance against saucy little Dallas mayoral minx Laura Miller, and seems to conclude that Mr. Bonderman gave (at least) as good as he got on the issues. But he utterly failed the all-important smell test of politics:
Mr. Gapper writes:
So why did he lose his cool when a self-righteous man from the audience demanded to know whether he felt an ethical responsibility to cease contributing to global warming? “You and others who are absolutists tend to be wrong almost always, in every event, at any time,” Mr Bonderman snapped back, promptly losing the audience’s sympathy.
It was an ingenue’s error. A smile lit up Ms Miller’s face and she said: “That was a really interesting answer.” No smart politician would have been caught losing his temper with a critic in that way, especially not on camera. As they have learned, in the age of YouTube, one reckless moment can doom them.
Being frighteningly smart—as Mr. Bonderman is reputed to be—can indeed be an asset in the public arena, but it is a tool one needs to wield with grace and charm. It tends to be counterproductive to use your intellect, marshalled facts, and superior grasp of the issues to bludgeon your opponents into submission, since being right is completely beside the point if you cannot persuade the audience that you are. In such instances, your audience will usually draw a different conclusion, one based—perhaps unfairly—on what they perceive to be your character:
BEING SURE OF YOURSELF MEANS YOU'RE A FOOL
HABITUAL CONTEMPT DOESN'T REFLECT A FINER SENSIBILITY
I have not seen all of the leading private equity founders present in public—I frankly would not have time to earn a living if I attended every bloody PE conference on the calendar—but I have seen enough to know that most of them need serious help in the public speaking department. The slickest and most persuasive, interestingly enough, was Mr. Bonderman's partner, Jim Coulter. He wowed an admittedly sympathetic audience with a description of the state of play in the PE sector, persuasively demonstrating not only that the punch bowl was not at risk of imminent removal but also that private equity has continued to create real value during the current boom. The only problem: he refused to answer questions. Annngkh! Wrong answer!
The good news is that experienced PE professionals know exactly what to do: call up those same public speaking coaches they inflict on their portfolio company management teams when they are planning to take them public. A few weeks of mock debates and speaking on video should whip them into shape toot-sweet.
The bad news is that the PE plutocrats are not going to be able to fob off the task of representing and defending the industry onto their new industry lobbying group. The constituencies that matter—the same ones who can inflict serious harm on the economics, taxation, and regulation of the financial sponsor industry—are going to demand to hear from the horse's mouth. I suggest stocking up on Binaca, Crest Whitestrips, and patience. And do not forget the cardinal rule of politics:
The goal of all of this extra hard work and suffering should be clear. Mr. Bonderman and his peers should devote their considerable talents, energies, and resources to make sure that their epitaphs do not read
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Oh, and David? If you plan any more public appearances, your wardrobe needs work.
Lose the friggin' patterned socks, will you? Christ Almighty.
© 2007 The Epicurean Dealmaker. All rights reserved.