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 cwitkowsky@buyoutsinsider.com.

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Note to Readers: It's that time of year ... for the 21st time, the editors of PE Hub and Buyouts honor exceptional buyouts with our Deal of the Year Awards.

Winners are chosen in seven categories: Deal of the Year, Large-Market Deal of the Year, Middle-Market Deal of the Year, Small-Market Deal of the Year, Turnaround of the Year, International Deal of the Year, and Secondaries Deal of the Year.

Go here for more information and to read about rules and methodology. Also check out past winners. Last year, New Mountain took the crown with its exit of Equian.

If you have additional questions, email Private Equity Editor Chris Witkowsky at cwitkowsky@buyoutsinsider.com.

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.