Power shift: What a Democrat-controlled Congress means for PE M&A

The Wire

Jan. 7 2021

What private equity should watch for under a Democratic Congress, Ares healthcare PE exec leaves firm

Morning!

Well, that was quite a day, huh?

Despite all the chaos, Congress did its job and certified the electoral college victory of president-elect Joe Biden. And we’ll have a new government on Jan. 20.

It’s worth asking, what does a Democrat-controlled government mean for private equity? This is a question I wasn’t really asking before the election, because it didn’t seem all that realistic. Who would have thought …?

Yet here we are -- Democrats won the remaining two Senate seats in Georgia, which means the Senate will be split 50/50, with vice president-elect Kamala Harris as the tie-breaking vote.

Issues like the tax treatment of carried interest, and GPs’ ability to write off interest expense on their deals, are likely to come up within the next two years as potential areas of change for progressives. If you haven’t seen Sen. Elizabeth Warren’s proposal to fundamentally change the way private equity operates, you should brush up on it. (Read it here!) We may be hearing a lot more about it, or at least some of the ideas Warren offered in her proposal.

Curious what a Dem-controlled Congress means for the M&A environment. If you have thoughts, hit me up at [email protected].

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Also of note (may require subscriptions)

Big move: Vincent Gombault, credited with building Ardian’s fund-of-funds business into one of the biggest secondaries buyers, stepped down from the firm, writes Private Equity International. Read it here.