Normally it’s a senior partner or a chief executive who provides a pithy quote or two for a press release. But some firms go that extra mile. The Blackstone Group, for example, kicked off its latest dispatch with some words from an altogether more senior source: the UK Prime Minister David Cameron.
The release concerned the construction of a fifth site in the UK by Blackstone portfolio company Center Parcs, a holday resort company it has owned since 2006.
|Thumbs up to Blackstone: David Cameron|
In keeping with tradition – prepared quotes are seldom ground-breaking – the Prime Minister’s soundbite wasn’t exactly incendiary. “Center Parcs is much loved by many and this new site is not only great news for holiday makers but great news for the economy too. This expansion and the jobs that it brings will be a real boost to growth and a sign of the increasing investor confidence that there is too,” he said.
But there’s a serious point to be made. Having Cameron’s comment there lends a welcome stamp of approval at a time when scrutiny of private equity has increased markedly.
Blackstone is also wisely highlighting the successful growth of a UK business within its stable, at a time when critics are questioning the industry’s ability to add value to the economy.
Remember, this is the firm which last year was heavily criticised after a former portfolio company, care homes group Southern Cross, folded under the weight of its debts. Blackstone was on the back foot for much of that episode, with the British press quick to point the finger, despite the fact it exited the business four years before the company encountered difficulties.
The news that Center Parc’s new development will create 1500 new jobs, together with a further 1200 involved in the construction, comes as a welcome bit of positive PR for the industry.
Blackstone’s also putting some more ‘skin in the game’ too – it’s injecting £100 million of new equity to help fund creation of the new site, together with £150 million of debt financing provided by RBS, Barclays, Lloyds Banking Group and HSBC – an interesting lending consortium considering the political dimension (two of those banks, Lloyds and RBS, are part-owned by the UK state).
Joseph Baratta, head of European private equity at Blackstone, said in a statement: “We have invested substantial capital in Center Parcs. We intend to stay invested in the business for many years to come. This is another example of the long-term investment that the funds we manage make in the UK. Our portfolio of companies in the UK, which now collectively employ more than 40,000 people, have invested approximately £1 billion in their businesses to expand capacity, improve facilities and drive growth.”
It’s encouraging to see the firm being proactive and setting the agenda, rather than reacting to criticism. The news gained traction in the mainstream media, not just the trade press – a fact no doubt helped by having a high profile seal of approval. At a time when the industry is under fierce scrutiny from regulators and politicians alike, other firms would do well to adopt a similarly proactive approach to spreading the PE gospel.