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What’s Your Five Year Plan?

How Private Equity Helps Businesses Grow over the Long-Term

Private equity firms make long-term investments in businesses and people, directly employing 8.8 million Americans across all fifty states. Altogether, private equity supports 5 percent of the country’s GDP and has a total economic impact above $1.1 trillion. In 2020, despite the economic uncertainty caused by COVID-19, private equity continued to make long-term commitments to businesses and workers across the country. Private equity invested $561 billion to over 4,300 companies in the U.S. last year, 2,100 of which were small businesses with fewer than 500 employees.

“Most Americans probably don’t realize the impact private equity has had on their lives — particularly in the past year,” said Drew Maloney, President & CEO of the American Investment Council. “Private equity investors apply capital and their industry expertise to grow many of the companies we know and love — as well as the companies we may not know by name, but improve our daily lives. Throughout the last year, private equity saved thousands of jobs and helped companies in hard-hit industries weather the economic crisis, such as restaurants, travel & hospitality, manufacturing and more. The role of private equity has never been more critical.”

Private equity firms have helped thousands of companies like Black Rock Coffee, Ingersoll Rand, Signify and Victory Innovations with five-year plans. The industry has a positive impact on several key sectors and areas, including:

  • Pensions: Private equity investments are consistently the best-returning asset class for pension funds over the long term – delivering returns of over 13.7% – and supporting the retirements of schoolteachers, first-responders, and other dedicated public servants.
  • Renewable Energy: Private equity firms are one of the largest sources of funding for sustainable energy companies and green jobs nationwide. Private equity invested more than $11 billion in wind, solar, and other renewable energy projects in 2020, nearly double the investments made in 2019.
  • Healthcare: Private equity firms provided capital to healthcare companies and hospitals combatting the COVID-19 pandemic and supported the development and processing of a robust antibody test, COVID-19 testing, and vaccines and treatments.