Personal Opinion: Why I’m Proud to Tell the Private Equity Story

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Tate’s Bake Shop started out as a small local bakery on Long Island. With the help of private equity, their cookies are now on grocery store shelves across the country. Tate’s holds a special place in my heart because our company, The Riverside Co., has worked closely with its founder, Kathleen King, to help transform this local bakery with a loyal customer base into a national brand that engenders similar devotion. .

These small business investments are one of the main reasons I’m so proud to be in private equity. Our industry is helping transform businesses, create jobs and strengthen pensions for workers across the country. I am grateful to help the industry tell its story as the new Chairman of the Board of Directors of the American Investment Council (AIC), the industry’s premier advocacy and research organization. I’m excited to educate people about the contributions of private equity to the country’s long-term economic growth and the retirement security of American workers.

I joined Riverside in 2006, after 21 years as a banker at JP Morgan, and I’m extremely proud of the work we’ve done in partnering with businesses of all sizes to help them grow and succeed. Last year, private equity invested more than $1 trillion in the US economy. The overwhelming majority of those investments — representing 84% of the thousands of companies that received private equity funding — went to companies with 500 or fewer employees. A third of these companies employed 10 workers or less.

The American Investment Council offers our industry the opportunity to tell its story to policymakers, the media, and the workers and retirees who benefit from these investments. I started getting involved with AIC in 2011 when Riverside joined as a new member. At the time, AIC was looking for someone to tell members of Congress how private equity firms like Riverside were working to support and grow small businesses. I haven’t forgotten how powerful it was to tell our story in front of Congress. I have remained an active member of AIC ever since and have seen our membership double. I urge more businesses to join in and share their stories.

We are working to ensure that more policy makers in Washington understand how private equity provides companies with capital and management expertise to scale and weather tough times in their business cycle. The American Investment Council also does important work compiling and publishing data and reports that show how private equity is having a positive impact on the US economy. Its annual report on pensions continues to show how private equity offers the highest returns for retirees and remains the strongest asset class year after year.

AIC also helps companies like ours showcase their own work in local communities. During the COVID-19 pandemic, we highlighted how Riverside-supported Bentley Laboratories, which traditionally produced cosmetics, moved their production lines to manufacture hand sanitizer. In a short time, Bentley produced more than 9,000 units of hand sanitizer critically needed by local first responders and healthcare workers in New Jersey amid shortages at the start of the COVID-19 pandemic.

The American Investment Council also works to educate policymakers about the impact of private equity in communities across the United States. For example, Riverside-backed Black Rock Coffee is a fast-growing company with 70 locations in seven western states. Like many restaurant businesses, Black Rock has struggled to navigate necessary but challenging COVID-19 safety protocols. Fortunately, Riverside stepped in and provided capital and expertise to help the business keep its doors open. In an interview last year with The Hill, Black Rock Coffee CEO Jeff Hernandez highlighted the benefits of private equity’s long-term investment strategy. “They’ve seen through the craziness and chaos of everything that’s going on in the world,” he said.

As the new Chairman of the Board of the American Investment Council, I want to help more people understand how much private equity surrounds them. In my personal experience, once people learn that private equity helps build better businesses, supports the jobs of millions of Americans, and generates outsized returns for public pension funds, they realize how our industry is important to the US economy. I am delighted to help AIC tell this powerful story.

Hendrickson is Chairman of the Board of the American Investment Council and Vice Chairman of The Riverside Co., headquartered in Cleveland.

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