The smoked salmon offensive

How Labour made peace with the private equity world and what it might mean

Hello!

Now the General Election has been called, the endorsements and political relations between different specialist interest groups and the political parties are emerging.

The Rainmakers community is no different.

In this week’s post we look at the efforts that have been made over the last year to make sure private equity industry and wider business investment sector not only has a fair hearing, but can influence policies that create win-wins for government and business.

But as the piece reveals, it’s been a long drawn out and well-planned charm offensive, involving key players on both sides.

HOW THE LABOUR PARTY LEARNED TO LOVE PRIVATE EQUITY

Over the next four weeks of the General Election campaign we are likely to see the fruits of the last four years of talking, schmoozing, reassuring and, apparently, lots and lots of smoked salmon served at breakfast.

The Labour Party, under the collective leadership of Sir Keir Starmer and the woman who would be his Iron Chancellor, Rachel Reeves, has been reaching out to the forces of capitalism and selling its vision of being pro-business and pro-worker.

At the heart of the conversation has been a reset in the relationship between the party and the investment world.

In the run up to the last election, in 2019, the words ‘private equity’ were used like a pantomime trigger for boos from the stalls.

Yet a truce has emerged.

In February, after a productive visit to the offices of homegrown northern private equity investor Endless in Leeds, Rachel Reeves said:

“The private equity and venture capital sector is incredibly important for fulfilling our mission to grow the economy. The work that you do ensuring that businesses can attract fast growing capital and the turning around businesses is vital for economic growth.”

More recently, in a letter released by business leaders early this week, endorsing Labour as the next government, one name that stood out was Manchester-based Hugh Campbell, founder of GP Bullhound, a real champion of the northern tech investment community, and a former Goldman Sachs banker before seeing the light and moving North.

None of this has happened by accident. In May 2023, the group representing the industry, the British Venture Capital and Private Equity Association (the BVCA) hired Karim Palant, a public affairs specialist who’d been working at the burgeoning social network that it’s safe to be on, LinkedIn, and at Facebook before that.

But crucially, Palant also spent the four years up until the General Election of 2015 as the head of policy for Ed Balls in his time as Shadow Chancellor.