WASHINGTON–(BUSINESS WIRE)–A new report released today by Ernst & Young sheds new light on private equity’s significant and positive economic impact in Kentucky and nationwide. Commissioned by the American Investment Council (AIC), the report offers a previously-unreported look at the industry’s growing role in supporting – both directly and indirectly – 327,000 jobs in Kentucky and more than 26 million jobs nationwide. This includes:
- Direct employment of 102,000 workers in Kentucky, who earn $69,000 per year in wages and benefits on average;
- State and local taxes of nearly $700 million in Kentucky;
- And related consumer spending supporting 10.4 million workers nationwide.
In conjunction with the report’s release, AIC is also launching a new website – www.ThisIsPrivateEquity.com – and a substantial national digital advertising campaign, including in Kentucky, to educate Americans about the positive role private equity plays in creating jobs, driving economic growth and supporting local communities.
“This new report shines an important and timely light on the positive and growing impact private equity has on the strength and success of economy, in Kentucky and nationwide” said Drew Maloney, AIC President and CEO. “From helping rebuild America’s manufacturing base to supporting millions of good-paying jobs in industries from tech to hotels to transportation and trade, private equity is a driving force for economic growth and opportunity for workers and families in Kentucky and throughout the country.”
The report reveals that U.S. private equity now supports five percent of America’s gross domestic product (GDP), with a total economic impact of nearly $12 billion in Kentucky and $1.1 trillion nationally. The study also shows that private equity plays a vital role in the tax base of our states and local communities, supporting critical investments in schools, transportation, infrastructure and other key priorities. In 2018, alone, the U.S. private equity sector paid $700 million in taxes in Kentucky, while over the same one-year period, the U.S. private equity sector paid $174 billion in federal, state, and local taxes nationwide. Approximately two-thirds of these were federal taxes ($113 billion) with the remaining taxes paid to state and local governments ($61 billion).
“Every single member of Kentucky’s Congressional delegation has private equity-backed jobs and investment in their local communities. Whether it’s picking up coffee from Dunkin Donuts, buying milk from Dollar General, staying in a hotel like a Hilton or taking an Uber or Lyft across their town, the positive force of private equity is being felt in communities and jobs throughout the country every day,” Maloney said.
Today’s report comes on the heels of a separate report from the American Investment Council detailing the critical role private equity now plays in providing a stronger and more secure retirement for millions of Americans, including teachers and first responders. The report analyzed investment returns by 165 U.S. public pension funds and highlighted how private equity continues to deliver the highest returns of any asset class. The study showed private equity continues to lead all asset classes in long-term investment performance, with private equity’s median 10-year annualized return of 10.2 percent surpassing public equity’s 8.5 percent and real estate’s 4.8 percent.
“Teachers, firefighters, police officers and other dedicated public servants in all 50 states will be able to have peace of mind in retirements due to the returns of private equity. Public pension funds across the nation partner with private equity because our industry has a proven track record of maximizing returns and providing stability for hardworking Americans,” Maloney concluded.