LI dealmakers debate good and evil

The question came suddenly and surprised the audience: Is the private equity industry evil? The industry, which uses money from investors to buy interests in companies, has gotten a bad rep, because sometimes employees lose their jobs as investors profit.

A panel of private equity executives spent an hour at Carlyle on the Green in Bethpage State Park Thursday night explaining how the industry works and advantages it offers to businesses.

The surprising question, at the end of the session sponsored by the Association for Corporate Growth New York, an organization of middle-market deal-making pros, was asked by panel moderator James Garbus, a partner at the Garden City law firm Meyer, Suozzi. The answer, from Richard Baum, managing partner of Consumer Growth Partners in White Plains, caused a titter from the audience: "A single-word answer from this [panel] is no," he said. "But evil is a relative term. What's evil to some is not evil to others. Private equity can have good results."

Stephen Lebowitz, managing director at Topspin Partners in Roslyn Heights, one of Long Island's largest such firms, said the private equity industry "is basically capitalism. We're motivated to grow businesses."

To Richard Prestegaard, director of business development at High Road Capital Partners in Manhattan, the industry is "the key vehicle to providing the American dream." And Paul Homer, a principal at Northwood Ventures in Syosset, said evil plays no role: "We take cash out, and [people] reap rewards."

Garbus noted at the outset that the industry has been "the subject of many headlines" during the Republican primary campaign, with Mitt Romney's opponents highly critical of Romney's Bain Capital equity firm. Romney has countered that the firm created jobs.

But there was agreement among panelists that industry professionals are often stung by the criticisms.

"It's very frustrating and annoying to me when my family from the West thinks that I do evil things with Wall Street," Prestegaard said.