A commonplace practice is to employ a 100-day plan at the beginning of an investment, created collaboratively by private equity managers and leadership teams at the companies in which they invest. A recent PrivCap interview with MidOcean Partners Managing Director Frank Schiff highlighted the 100-day plan, where, spending a lot of time with a company’s management, his firm aims to, “take companies in the middle market from where they sit today and hopefully put processes in place in order to really grow and go to the next level.” According to Schiff, 100-day plans cover a range of strategic issues, including operational, administrative, financial reporting issues, and more.

Private equity’s management expertise can be highlighted through collaboration and identifying opportunity throughout a partnership, as well. We saw this highlighted in the Carlyle Group’s investment in AxleTech, as well. Working with Carlyle during its ownership, CEO Mary Petrovich led AxleTech’s foray into the fast-growing military sector, targeting its heavy-duty axle and suspension systems toward military vehicle manufacturers building heavy armored vehicles for American soldiers in Iraq and Afghanistan. “I’m very passionate about private equity,” says Petrovich, “because it’s not only made a difference in my life; it’s made a difference in the lives of 1,000 other employees of AxleTech’s.”

See the AxleTech video case study below, and click here for more examples of how companies across America benefit from private equity investment.

Carried interest is taxed at the capital gains rate because it is a profits interest on a long-term capital asset.  This policy encourages the risk taking that is required to save, start and grow companies. Changing the taxation of carried interest would upend a long-standing, successful policy that has helped America prosper for more than 100 years. It is commonplace in partnerships including private equity, venture capital, real estate partnerships and general business partnerships.

“Carried interest is commonly misunderstood in public discourse. Our newest whiteboard video demystifies the topic and answers questions about what carried interest really is, how it works and why it’s appropriately taxed at the capital gains rate,” said Steve Judge, president and CEO of the Private Equity Growth Capital Council. “Carried interest is an important part of the private equity business model – a model that is responsible for pumping hundreds of billions of dollars into the U.S. economy each year, while strengthening businesses for the long-term.”

Citing his experience at CommVault, Hammer explains that private equity:

“provided the breathing room that allowed us to think beyond where our customer’s needs were today and focus on where the market was heading tomorrow. We also obtained new, additional financing from other private equity firms and corporate investors that enabled us to invest heavily in R&D to cultivate next generation products, support and services.”

Today, CommVault is a highly profitable, publicly-traded technology innovator with more than 1,500 employees and 16,000 customers.

Furthermore, Hammer explains that the benefits of private equity go well beyond any individual investment.  Private equity, he says, “plays a vital role in our economy, creates jobs and tax revenue and spawns businesses and innovation.”

You can read Hammer’s full blog post by clicking here. To learn more about how the private equity business model really works, watch our video “What is Private Equity.”

Roberts also discusses being one of the first private equity investors to partner with pension funds. For Roberts, the partnership is a natural one. Pension funds depend private equity to generate the long term returns needed to cover liabilities while private equity firms need pension fund investment to fund their business.

62 percent of all money invested in private equity comes from pension funds, charitable foundations and university endowments.  In addition to strengthening companies and driving economic growth across the United States, private equity has been an essential source of investment returns for these investment groups.  PEGCC recently released a new interactive map that includes pension information and rankings.

“There’s a great dynamic at play here, in addition to all the wisdom of how to stand up this company,” says Atchison. “But [also] smart investing, sensible capital and getting great returns on it. And really a great example of how an economic impact can be made with investment like private equity through Blackstone.”

See the full video below.

Cleveland may not come to mind as the typical headquarters for an innovative software company, but Hyland Software – referred to by as its founders as a “Silicon Valley in the Rust Belt” – has thrived in its Midwestern setting with the help of private equity. In 2007, Hyland Software realized the enterprise content management (ECM) software marketplace was consolidating and needed help to stay ahead of competitors.  Hyland and Thoma Bravo formed a strategic partnership to grow the company, make acquisitions and integrate technologies. Since Thoma Bravo’s initial investment, Hyland has experienced significant growth and has doubled its number of employees to more than 1,300.

According to A.J. Hyland, president and CEO of Hyland Software, “It is unlikely that Hyland Software would be where we are today without private equity.”

Orlando Bravo, managing partner of Thoma Bravo said “Private equity is out there to improve corporate performance. Improving corporate performance involves evaluating and strategically enhancing all aspects of the corporation, including the customer base and employees, and doing so consistently over time.”

Some highlights of Thoma Bravo’s investment in Hyland Software include:

• Hyland has more than 1300 employees, double the amount it had less than five years ago. The company expects to hire 150 more by the end of 2012.

• Since its initial investment in 2007, Thoma Bravo has helped Hyland purchase five companies and grow revenue by $144 million.

• Hyland has increased its customer count by 4,000 customers to more than 10,800 lifetime customers since the investment.

In 2002, Kohlberg Kravis Roberts & Co. acquired ITC from DTE Energy and worked with regulators to establish the company as an independent owner and operator of the transmission grid in Southeast Michigan. During their ownership, KKR injected more than $400 million of growth capital allowing ITC to rebuild and upgrade the transmission grid in southeast Michigan.

Ten years after KKR’s investment, ITC has now grown its workforce from 38 to more than 450 employees and nearly 1,000 skilled labor contractors.

See the full video here.

Investment Highlights:

• During KKR’s ownership, the Company invested over $400 million to rebuild and upgrade the transmission grid in southeast Michigan.
• KKR exited this investment in 2007. Today, ITC is the largest independently owned and operated electricity transmission company in the U.S. and is the ninth largest electric transmission-owning company in the country based on total retail megawatt hours sales.
• ITC’s and its operating subsidiaries now have more than 400 employees and nearly 1,000 skilled labor contractors.

Private Equity at Work was designed to educate new audiences about private equity while cutting through political rhetoric. The private equity “Success Stories” page features short videos about companies that received PE investment and were able to thrive as a result. Private Equity at Work also features educational content about the private equity business model. Watch our “What is Private Equity” video for a simple breakdown of how private equity invests.

Judge explained that there is a lot of hyperbole about what private equity is and what it does but given the recent scrutiny in the press, there is an opportunity tell people about how it invests in companies and provides returns to pension funds and endowments.

Watch the clip here:

“I think the asset class that’s been the most prolific and obviously the most profitable has been private equity, and they’ve sustained us for a long period of time,” said Jordan. “There are many students that are walking around Notre Dame today that have scholarships because of our private equity portfolio because we’ve been able to garner great returns in private equity over time.”

See a clip of the segment below.