Anti-Buyout Rhetoric Could Scare Off Investors, Say Dealmakers

Anti private-equity rhetoric could creep into discussions between managers and investors, affecting the amount of money some firms can attract, said co-founder of Searchlight Capital Erol E Uzumeri.

Uzumeri, who was speaking at a Bloomberg Canada Economic Summit, said some investors are beginning to evaluate managers based on criteria outside of their investment performance. While analysis is good, you have to make sure it isn’t politically motivated, said Uzumeri.

Opponents of Republican presidential candidate Mitt Romney are fueling a debate over private equity’s role in the economy, calling into question whether the industry creates value and jobs.

“Nobody wants to see their industry being tarred and feathered,” said Onex Corp. (OCX) Managing Director David Mansell who also spoke at the conference. “I could see why it might scare off certain pension plans, especially those in the states that have political pressure. If you’re successful and have a good track record, you’ll be able to attract capital.”

To contact the reporters on this story: Cristina Alesci in Toronto at calesci2@bloomberg.net; Doug Alexander in Toronto at dalexander3@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net