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After suffering a verbal mauling by MPs on the Commons’ Treasury committee’s inquiry into private equity on Tuesday, Mr Kolade said he had asked the BVCA’s beleaguered chief executive, Peter Linthwaite, to step down from a new review of the industry body, due to report in October. He also removed Jeremy Hand, the vice-chairman, from the review. But he denied speculation that Mr Linthwaite had resigned. “He is being asked to do something he was not hired for. People are already saying Peter should step down. I think that is unhelpful,' said Mr Kolade, who runs Isis, his own venture capital firm. “If we get to the point where he says, ‘No I can’t do this any more,’ then we will have to make a decision. But we are not at that point yet,' he said. But his assurances are unlikely to appease many of his members, who have long been calling for Mr Linthwaite’s head.
One UK buyout executive said: “These people are used to being very articulate in winning mandates and convincing management to accept a bid, yet they are so poor at explaining themselves to policymakers. It makes me angry.' The crisis at the BVCA reflects how private equity has been reluctantly dragged into the public spotlight after buying household-name companies, such as the AA and Alliance Boots .
The naturally secretive buyout firms have suddenly found themselves and their trade body ill-prepared for the criticism aimed at them by politicians, media and trade unions. “The BVCA was set up by the industry to do one job – to act as a shield from the public. That is no longer good enough,' admitted Mr Kolade. The aggressive grilling of Mr Kolade, Mr Linthwaite and Mr Hand on issues ranging from tax and debt to transparency and pensions, was watched closely by buyout chiefs across Europe and the US, particularly by the five private equity titans due to appear before the same select committee next week.
The five European executives from Kohlberg Kravis Roberts, Blackstone, Carlyle, 3i and Permira have been preparing by answering mock questions from their own staff. Some of them, such as Robert Easton, a partner in Carlyle’s European fund, are waiting for a transcript of Tuesday’s hearing to swot up on responses. There is growing support from other industry bodies for private equity’s role.
Richard Lambert, head of the CBI business lobby group, last month made an overt pitch to the big, cash-rich buyout groups to join his members. However, some industry observers have argued that inviting private equity groups to sit at the same table as the listed companies they might one day bid for is akin to “putting the foxes among the hens”.