Private Equity Is Boosting Republicans Over Democrats in Midterms

(Bloomberg) -- The investing industry is throwing its weight behind Republican allies ahead of the US midterm elections in an effort to stem a populist wave it fears will bring greater scrutiny of private equity's reach.

Private equity and money managers doled out more donations to Republicans than Democrats this year for the first time since 2016, with billionaires from Apollo Global Management Inc. and Blackstone Inc. opening their checkbooks. Blackstone's chief executive and Republican mega-donor Steve Schwarzman has donated more than $33 million to Republican candidates and their allies this cycle.

Overall, donations to Republican candidates, leadership political action committees and party committees from the investing sector were nearly 70% higher than comparable contributions supporting Democrats, according to OpenSecrets data.

That disparity in giving is far wider than has been seen in recent election cycles. But this year the industry has seen a rightward tilt amid concerns that Democrats could regain control of the House of Representatives – and maybe the Senate, too – and turn the spotlight on an industry that progressives have often cast as a bogeyman. The hope is to boost allies that could block regulation and serve as legislative brakes under Democratic control.

While they put dollars behind Republicans, credit executives have also stepped up visits to influential Democrats in recent months, said a person familiar with the matter. That includes meeting with Representative Maxine Waters, the person said, the ranking member on the House Financial Services Committee who is likely to take a bigger oversight role if the Democrats control the chamber.

Executives are not only girding for an unfavorable legislative agenda: They worry that the industry is poised for a moment like big bank CEOs faced in the wake of the 2008 financial crisis, when executives were hauled in front of Congress for grilling. That kind of unwanted attention would be another headache for an industry already struggling with high interest rates, waning investor enthusiasm and underwhelming returns – and could come from a wide range of lawmakers.

"The industry views the populist streak on the right as just as worrying as the energy behind the progressive left," said James Maloney, managing partner of public affairs firm Tiger Hill Partners and a former spokesman for the industry's main lobby group.